Did You Know That A Streamline Refinance Is The Hottest Mortgage In Today's Market? Find Out If You Qualify Now While Rates Are Low!

What Is The Purpose Of The Streamline Refinance?

By Nathan Soliday

The FHA Streamline Refinance has been put in place for the simple reason of giving homeowners an easy solution to reducing their interest rate on their mortgage.

The name Streamline Mortgage describes the program perfectly. The process has been Streamlined so that a home owner can easily get a lower rate without having to go through the hassle of digging out w2's, pay stubs, tax returns, etc.

The purpose of the program is mainly to lower the rate, but there is another facet to the Streamline Refinance that can be used as well.

A Cash Out Streamline does exist but it does require an appraisal and standard documentation of a regular mortgage.

So why do a Streamline for cash out? 

The biggest reason is to keep you from having to pay a full FHA Funding Fee if you have had your loan for less than 3 years.

Find out if you qualify...

Should I Go To One Lender, Or Should I Shop Around?

As a mortgage banker, I want to say that this is a very important question that you should ask.

Just like with any product or service that you are considering, it always pays to shop around.

Why does it work?

Shopping around let's the mortgage broker know that he will have to give you a competitive quote to earn your business.

 Maybe this seems obvious, but when you have several different mortgage brokers fighting to give you a loan, the inevitable outcome to this is that the company with the lowest rate and lowest closing costs are most likely going to win your business!

 With this in mind, shopping around should work right into your mortgage strategy because it keeps brokers honest and they know if they try to charge you a big origination fee or an unusually high rate they will probably lose your business to a competing broker.

There are several ways to shop around without having to drive from broker office to broker office getting quotes on different loan programs.  The internet offers a convenient way to shop around by simply filling out one online application.

How Do You Qualify For An FHA Streamline Refinance?

Many people are trying to figure out if they qualify for an FHA Streamline Mortgage Refinance, and maybe you are one of these people?

Here are a few things to consider for the Streamline:

1.) You must currently have an FHA Loan

2.) You must be "current" with your mortgage at this time

3.) You must have a clean 12 month pay history meaning no "30 Day Lates" on your mortgage

4.) You need to be able to provide proof of your social security number

5.) That is about it... pretty easy, isn't it? 

The FHA Streamline is a wonderful program for this time in our marketplace because there is no appraisal required. Maybe you purchased your home for $270,000 two years ago with 7% rate and you would like to refinance now and the value of your home has dropped to $240,000 then the Streamline is the program for you.

NO APPRAISAL IS REQUIRED... your original value when you attained your FHA loan is what is used.

Mortgages do not get any easier than a Streamline Refinance!

Streamline Your FHA Mortgage Today

FHA has permitted streamline refinances on insured mortgages since the early 1980's. The "streamline" refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:

Lenders may offer streamline refinances in several ways. Some lenders offer "no cost" refinances (actually, no out-of-pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the lender pays any closing costs that are incurred on the transaction.
 

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 the original loan amount. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal.