FHA Streamline Loan Guide
Loan Type: FHA Streamline Home Loan
Specific Uses: First Time Home Buyers, Refinance, Small down payment, Debt Consolidation, Reduce monthly payments, Lower Interest rates, Easier Refinancing, No Closing Costs (depending), Affordable.
What is an FHA STREAMLINE Mortgage?
An FHA STREAMLINE Mortgage is a Federal Housing Authority mortgage home loan. It is a loan that is insured by the government to the bank or lender in case of a default by the Homeowner(s). This is a great loan option for first time home buyers, refinancing, cash out refinances, minimum down payment ability, blemished credit scores, debt consolidation and lower income households. These are not the only reasons why FHA Streamline loans are appealing. This refinance option can be a quick and seamless process.
FHA STREAMLINE Home Loan Summary:
An FHA STREAMLINE Home Loan is a simplified loan refinance process. The FHA Streamline allows homeowners that have been current on their already existing FHA home loan to refinance it in a very simplified process. Many times there is no appraisal, no income verification, no minimum credit score and no equity requirement.
Beware that on an FHA STREAMLINE Home Loan, the interest rate might be lower but there is Private Mortgage Insurance added into the monthly mortgage payment.
An FHA STREAMLINE Home Loan also will charge Upfront Mortgage Insurance of a rate of 1.75% and .85% annually. This may vary depending on when you originally received your FHA loan.
FHA STREAMLINE Home Loan Guidelines:
- DTI: (Debt-to-Income) Ratio Not Calculated
- Max Loan Amount: This depends on the county and its Loan Limits
- Income: 2 Years full tax returns required
- Min Credit Score: None (depending on Lender)
- Escrows: Required (Must include Real Estate Taxes, Home Insurance and Mortgage Insurance with monthly payment)
- Max CLTV: (Combined Loan-to-Value) on an FHA STREAMLINE Home Loan is 97.75%
- Collections: Any Collection balances over $2,000 must be collected or have made payment arrangements prior to closing.
- Down Payment: N/A Refinance Only
- Missed a Payment? No 30 Day Mortgage Late Payments allowed in the last 12 months.
FHA STREAMLINE Home Loan Facts:
- No Appraisal is Required.
- Available Mortgage Terms: 15 Year or 30 Year
- Payment must be reduced by 5% or more. (Principal + Interest + MI)
- Must own your home for more than 6 months before eligible for Refinancing.
- New Loan Amount cannot exceed the current loan amount.
- No Verification of Job, Income or Credit
- You can receive a refund from FHA for refinancing.
- Closing Costs must be paid upfront unless an appraisal is ordered.
- “No-Cost” FHA Streamline loans are available.
- If you are located in a Community Property State, the lender is required to pull credit on a spouse that is not on the mortgage.
- When the Lender is verifying Assets, they will need to document source of funds of large deposits over 1% of the Loan amount.
- Debt-to-Income Ratio’s on an FHA STREAMLINE mortgage are usually higher (better) for borrowers with income qualifying issues.
- Upfront Mortgage Insurance Premium = 1.75% of Loan amount (depending on when FHA STREAMLINE Loan was obtained)
- Annual Mortgage Insurance Premium = .85% (depending on when FHA STREAMLINE Loan was obtained)
There is still much more information about FHA STREAMLINE Home loans provided by the Federal Housing Authority. Reach out to your bank or lender for more specifics on what you can qualify for.
As we like to say here at HC: Ask. Learn. Save.
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