Updated April, 2015
FHA Streamline Refinance Rules 2015: The NEW FHA Streamline Facts
The changes outlined below are effective January 26, 2015. (Mortgage Letter 2015-01) FHA has reduced its mortgage insurance premiums as of January 26, 2015 and this means that new FHA borrowers to take advantage of the 0.50 basis point reduction on annual Mortgage Premium rates. If eligible, existing FHA homeowners may be able to choose an FHA streamline mortgage refinance in order to take advantage of these new MIP rates.
An FHA streamline refinance is often considered by FHA homeowners who would like to reduce their rate and mortgage payments with less documentation required. The streamline refinance program is one of the benefits that the FHA offers to its borrowers, as it is usually a quick and the least expensive process with lenient documentation and credit standards as oppose to a traditional refinance.
New 2015 FHA Mortgage Insurance Premium Rate Reduction
The FHA has become an even greater deal for FHA borrowers in 2015. Recently, the Federal Housing Administration (FHA) reduced its annual mortgage insurance premiums by as much as 0.50%. This may result in many borrowers today to take advantage of these rates through FHA’s Streamline Refinance program.
Eligible borrowers may now be able to ditch their current interest rate and monthly mortgage insurance through one refinance transaction.
FHA also offers a refund on Upfront Mortgage Insurance Premiums (UFMIP). This means that some of the upfront premium that you have had to pay at the time of closing on your original mortgage loan may now be credited towards your new loan’s UFMIP.
Benefits of an FHA Streamline Refinance
If you are a current FHA-insured mortgage homeowner, you may fine that the FHA offers several advantages. One of the advantages is the FHA Streamline Refinance program. Here are a few of the common advantages, such as:
- Usually does not require for an appraisal
- Underwater homes may be eligible
- Offers some of the lowest rates
- Typically does not require for additional proof of income documentation
- You may be able to qualify for a refund on your Upfront MIP that you originally paid
- All FHA loans with a closing date of June 1, 2009 may be eligible for a reduction in mortgage insurance premiums by 0.01% for upfront and 0.55% for monthly
- With a Streamline Refinance under the FHA, the closing time tends to be a lot quicker
- The FHA streamline refinance program has been helping homeowners lower their rate for a few years and is considered to be one of the most easiest refinance process around.
Most of the time, the FHA streamline guidelines say that no new appraisal required (the original loan price is used), no new credit review is required, no verification of employment or income is required, and no cash back is allowed. But don’t be confused ”“ just because the government guidelines say one thing doesn’t mean that lenders aren’t requiring another. Many lenders have additional requirements that require additional requirements such as appraisal, credit verification, etc.
UFMIP and MIP for FHA Streamlines
For streamline refi transactions endorsed by FHA on or before May 31, 2009, the annual MIP will be reduced to .55 percent or half of the current annual fee and the upfront MIP will be lowered to .01 percent. The changes were made effective as of June 11, 2012.
FHA Streamline Rates
Just like interest rates from other mortgage products, the FHA streamline refinance rates change every day. To see an average of what interest rates are being quoted today, click here, type your zip code in over on the right hand side to see what lenders are offering in your area.
FHA Streamline Credit Score Requirements
Many people ask if FHA requires a minimum credit score when doing an FHA streamline refinance and the short answer is “yes” but it will vary by lender. Lenders may carry different minimum credit score requirements for the FHA streamline program.
If you aren’t sure what your credit score is exactly, be sure to ask your lender to help you get a copy of your credit report.
FHA Streamline Appraisal Requirements
There are two types of FHA streamline programs ”“ the “FHA streamline with appraisal” and the FHA streamline without appraisal” programs. The FHA streamline without appraisal program may be an ideal solution for people who currently owe more than their home is worth and don’t want to hassle with a loan modification.
Get The Best Deal: Shop Around
If you currently have an FHA loan that you have got in the last few years, chances are high that you are at a higher interest rate than is currently available. When you go to look at what your refinance options are, chances are if you just want to lower your mortgage payment and not get any cash out then the FHA streamline program is right for you and then the next step to take is to start shopping lenders. There are many lenders who can help you and the key is to do as much homework as you possibly can about what types of questions to ask lenders and then start to work with the one that you like the best.
To find out if the FHA streamline program can help you lower your monthly payment and put you in a better overall financial situation, be sure to shop around and speak with a loan officer at a lender who specializes in the FHA programs. When you find the right loan officer who has the right knowledge, the next step is to get your application completed and turned in before rates go back up and it no longer makes sense to refinance.