About the FHA Streamline Refinance program
While it might sound too good to be true, the FHA Streamline is a perfectly legit refinance program backed by the Federal Housing Administration. It can offer a simplified, low-doc application process and below-market rates.
One may also ask, are there closing costs with an FHA streamline refinance?
FHA does not allow lenders to include closing costs in the new mortgage amount of a streamline refinance. Investment properties (properties which the borrower does not occupy as his or her principal residence) may only be refinanced without an appraisal.
Correspondingly, what are the benefits of a FHA streamline?
The FHA Streamline has five main advantages.
- No appraisal is required. …
- No verification of income or employment is required. …
- The process is easier and faster. …
- Rates are the same as on regular FHA mortges. …
- There is no prepayment penalty.
Does FHA Streamline get rid of PMI?
If you bought a house with an FHA loan some years back, you may be eligible to cancel your FHA PMI today. … If your loan balance is 78% of your original purchase price, and you’ve been paying FHA PMI for 5 years, your lender or service must cancel your mortgage insurance today — by law.
“Except for credit qualifying streamline refinances, FHA does not require a credit report. The lender, however, may require this as part of its credit policy. If a credit score is available, the lender must enter it into FHA Connection (FHAC).
45 to 60 days
For an FHA streamline refinance, typical closing costs range between $1,500 and $4,000. Though, closing costs can vary widely depending on the lender, borrower characteristics, and the loan amount.
The FHA Streamline Refinance program gets its name because it allows borrowers to refinance an existing FHA loan to a lower rate more quickly. Avoiding a lot of paperwork, and often without an appraisal, the Streamline option saves borrowers time and money.
8 best FHA refinance rates of 2020
- PennyMac: Best for 30-year FHA refinance.
- US Bank: Best for 15-year FHA loans.
- Bank of America: Best for current customers.
- Guaranteed Rate: Best for helpful tools.
- Better.com: Best for low rates.
- Loan Depot: Best for no lender fees.
- Quicken Loans: Best for customer service.
Each point typically lowers the rate by 0.25 percent, so one point would lower a mortgage rate of 4 percent to 3.75 percent for the life of the loan. Homebuyers can buy more than one point, and even fractions of a point.
The FHA streamline is available to homeowners who currently have an FHA loan and are currently a Wells Fargo customer. Just like with other refinance options, a borrower must have a good payment history.
FHA Streamline Refinance Drawbacks
- Only available to current FHA borrowers.
- Must pay UFMIP and other closing costs.
- UPMIP is the only closing cost you can finance.
- New mortgage can’t be larger than current mortgage.
- Cash back limited to $500.
- Won’t eliminate MIPs.
Because it’s a riskier product for lenders, the FHA cash–out refinance loan requires more documentation than does the FHA streamline refinance. An FHA streamline refinance loan allows you to refinance to a lower rate with little documentation, but it doesn’t allow any cash to the borrower.
What documents do I need for an FHA streamline refinance?
- Current mortgage statement.
- Current FHA loan’s mortgage note, which shows your current interest rate and loan type.
- Final settlement statement (final HUD-1) or Deed of Trust with the FHA case number of your current loan.