Streamline FHA Mortgage
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FHA has permitted streamline refinances on insured mortgages since the early 1980's. The word “streamline” refers only to the amount of documentation and underwriting that needs to be performed by the mortgage company, and does not mean that there are no costs involved in the transaction.
The Basic FHA Streamline Refinance Requirements:
- Loan must be an FHA insured loan
- Refinance must lower the principal and interest payments of the previous mortgage
- Mortgage must be current
- Mortgage musty be at least 6 months old
- No Cash Back to Borrower
- No Income Verification Required
- No Employment Verification
- No Pay Stubs or W-2 forms
- No Termite Report
- Borrower must be current on any federal debts
Lenders may offer
streamline refinances in several ways.
Lenders may offer
streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, as determined by an appraisal.
Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed what is currently owed, i.e., closing costs may not be added to the new mortgage with those costs either paid in cash or through the premium rate as described above. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal and, thus, closing costs may not be included in the new mortgage amount.
