A streamline refinance is a refinance for borrowers who currently have an Fha loan. The documentation that is required for a streamline refinance is wee compared to a regular refinance. Using this type of loan to refinance does not mean there will be no end costs. end costs still apply, however they may be lower than your proper refinance since you do not need an evaluation or reputation article on inevitable programs. The basic guidelines to be eligible for an Fha streamline refinance are:
1. You must currently have an Fha insured loan on your home.
2. You must be current on your mortgage payment.
3. The streamline refinance must lower the borrower's current principle and interest payment_ unless the borrower refinances into a shorter term loan, then the P&I payment can not go up more than 20%.
4. No cash may be taken out on a streamline refinance.
Fha will need verification of employment, but not earnings verification. No tax returns, W-2's or paystubs required. Also, a reputation article is not required.
An evaluation is required only if the borrower is rolling the end costs into the loan. If the borrower decides on a No-Cost streamline refinance which is available, or pays the end costs out of pocket, then no evaluation is required. If the borrower decides to roll the end costs into the loan, an evaluation is required and there are maximum Loan to Value requirements on the new loan.
If you have a 2nd Trust Deed on your asset and you are not paying that loan off with your refinance, the current lender on the 2nd Trust Deed must agree to subordinate to the new first Fha loan.
This Streamline Refinance Fha loan is excellent for the borrower that is in good standing on their current loan, but has a high interest rate and would like to refinance to lower their payment. Fha's streamline refinance allows borrowers to refinance their current mortgage with less documentation than a regular refinance loan. Since an evaluation is not required in most cases, this is an excellent loan for borrowers that do not have a lot of equity. It's also a great loan for population who pay their mortgage on time but don't have good reputation otherwise.
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