FHA Streamline Refinance
The Federal Housing Administration (FHA) has created a rate reduction program called the Streamline Refinance. This provides a way for current FHA homeowners to lower their interest rate with little or no out-of-pocket costs. These loans can also be made faster and with less documentation than a typical loan.
- NO appraisal
- NO income verification
- NO face-to-face application
If you chose the no appraisal option you may have to bring some money to closing. You can also skip up to 2 months house payments. If we do an appraisal we can roll the closing costs into the new loan.
Example
Current Loan
Originally Borrowed $150,000 / 5.875% current rate/ 30 year loan
Principle & Interest Payment $887.31
Have been paying on this loan for 1 year. (29 years left to pay)
Total payments left on this loan is $308,783.88
Refinancing New Loan
New Loan Amount
$152,000 ( with closing costs)
4.5% New Rate
30 year loan
Principle & Interest Payment $770.16
Monthly Savings of $117.15
If you apply your monthly savings towards your principle balance on your new loan it will pay off in 275 payments or 22 years and 11 months.
Total payments $244,010.25
** Saving you $64,773.63 in interest **
Basics of the FHA Streamline Refinance:
- Borrower’s original loan must already be an FHA insured loan.
- The refinance must lower the principal and interest payments of the previous mortgage payment.
- The mortgage must have been paid as agreed for the last twelve (12) months and must be up to date at the time of refinancing. Borrower must have had the FHA mortgage for 6 months.
- Borrower can receive up to $500 cash back.
- No income or employment verification – No pay stubs or W-2 forms.
- Appraisal only required if rolling in the closing costs. Streamlines without an appraisal are limited to the unpaid principal balance, minus any refund credit of the mortgage insurance premium, plus the new upfront MIP if it is to be financed in the mortgage.
- Any other liens must be subordinated to the FHA loan.
- Borrower must be up-to-date on any federal debts.
Comments or questions are welcome.
