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FHA Streamline Refinancing

What is “Streamline” refinancing?

FHA Streamline Refinancing is reserved for homeowners who already have an FHA home loan in place.

What is the benefit of a Streamline Refinance?

FHA Streamline Refinancing is the fastest, simplest way for a homeowner with an existing FHA loan to refinance their mortgage. The original purchase price of the home can be used in place of obtaining the value of the home through an appraisal. This is a good option for homeowners who may be “underwater” on their mortgages, because it uses the original purchase price instead of the current value of the home, which may have gone down due to fluctuations in the real estate market.

Who is eligible for Streamline Refinancing?

Streamline refinancing is reserved solely for homeowners who already have an existing FHA loan. When you apply, your income, assets, liabilities and credit history will be evaluated. Less-than-perfect credit can be overcome to successfully apply for an FHA loan. Additional requirements include:

  • 3 months of perfect payment history on your current FHA loan
  • A minimum of at least 6 payments on the existing FHA loan
  • A minimum of 210 days must elapse from the most recent loan closing date
  • The loan balance can not increase to cover loan costs
  • You must be able to demonstrate a Net Tangible Benefit from FHA Streamline Financing, such as:
    • Reducing the sum of the principal, interest and PMI
    • Changing from an adjustable rate mortgage to a fixed rate mortgage
    • Using a cash-out refinance to consolidate debt or pay other expenses

There are other factors to consider. A loan consultant from Great Northern Mortgage can help you determine whether or not an FHA Streamline Refinance is right for you.

What else is different?

In general, not needing an appraisal is the biggest differentiator from other FHA loan programs. Otherwise they are similar, coming in 15 or 30 year terms, and being available with either adjustable or fixed interest rates.