Scott Storace - Branch Manager, 100 Pacifica Drive Ste. 140, Irvine CA 92618 NMLS #226339 949.973.0141

"From the minute you call me to the minute we close, I have your back. No hassles, no banker’s hours & quick response times." - Scott Storace

  • Home Loans up to $3,000,000
  • Interest Rate Float Down Option
 

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FHA Streamline Refinance

Put some of the home payment back in the piggy bank.Orange County, CA – An FHA streamline refinance enables homeowners to convert part of their mortgage into savings. Reducing the payment means putting money back into their piggy bank not the corner bank!

Homeowners refinance their loans for two purposes. They are seeking to take cash out of the property or modify their rate and terms. Traditional refinances require full documentation and an appraisal. Streamline refinances do not. The process and documentation is streamlined. Today’s post will dive into the specifics of the FHA streamline refinance. Here are the main guidelines.

  • This is not a cash-out refinance program. You can’t receive money back in excess of $250. And you can’t combine your first and 2nd loan into one loan with the FHA streamline. A 2nd lien must be re-subordinated.
  • No appraisal is required.
  • In Orange County, CA the maximum FHA loan amount currently stands at $729,750. FHA loans up to this amount are eligible.
  • 1-4 unit properties and condominiums are eligible. Co-ops and manufactured homes are not.
  • A minimum middle credit score of 640 will be needed.
  • Reduced documentation: Your income, assets and real estate are the only items we verify directly.
  • Debt ratios are not calculated or verified. This is a manually underwritten loan.
  • An FHA streamline refinance is not allowed until you have made at least 6 payments on the initial loan or waited 6 months from the date of the first payment.
  • To be eligible for an FHA streamline refinance you must be able to prove there’s a net tangible benefit to the borrower. This means that we must be able to prove it makes financial sense. So, when refinancing a fixed loan to another fixed loan your principal, interest and mortgage insurance payment must drop 5%. When refinancing a short term ARM to another short term ARM your interest rate must decrease at least 2%.
  • Properties that have been converted from primary properties to investment properties or second homes are allowed.
  • If your FHA loan is less than 3 years old then you will receive a prorated refund of your initial Up Front Mortgage Insurance Premium. It will be deducted from the current terms.
  • If your home was on the market for sale and you’ve changed your mind you are still eligible for an FHA streamline refinance. Your home must be pulled off the market 1 day prior to submitting your application.
  • It’s easy to add a borrower to the mortgage. The new borrower must simply meet the current credit score requirements.
  • Removing a borrower is allowed. However, if you decide to remove a borrower then the remaining borrower(s) must be credit qualified. We will need to verify income, assets, credit, liabilities, employment, debt ratios, etc.
  • Mortgage insurance premiums and annual mortgage insurance rates will be based upon the date that your loan was initiallydelivered to FHA.

The benefits of an FHA streamline refinance are great. Homeowners are able to reduce their interest rate and payment regardless of the equity in their home. In today’s world where housing values have decreased dramatically, it’s crucial. Interest rates have dropped dramatically as well. This FHA streamline refinance program allows homeowners to reduce their monthly payment simply and easily. Lower monthly payments reduces the strain on the family budget. In some cases it can be the key that allows families to stay in their homes.

Scott Storace

 

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