FHA Streamline Refinance Requirements

The FHA streamline refinance is a program that is offered through HUD that will allow you to refinance your existing mortgage. This type of mortgage is designed to speed up the process and lower the amount of paperwork that is required for a refinance. Here are the basics of the streamline refinance and some of the requirements that you will have to meet in order to get one.

Existing FHA Loan

One of the main requirements that you will have to meet in order to qualify for a streamline refinance is that you have to have an existing FHA loan. Anyone that has a mortgage that is not an FHA loan already will not be able to qualify for the program. With an FHA streamline refinance, they are not going to do a credit check or an appraisal on the property. This will significantly speed up the process of the refinance, but it will not be possible unless you have already done this in the past. This is why the FHA requires you to already be a customer before you can qualify for this program.

Lower Payments

You also have to have the proper reasons for refinancing your mortgage with this program. With a traditional refinance, you could potentially refinance your mortgage in order to take cash out of your equity. With the streamline refinance program, this will not be possible. You can only qualify for the FHA streamline refinance program if you are trying to lower your monthly payments. Since you have already been paying on your mortgage for a certain amount time, you will undoubtedly have acquired some equity in the property. With this program, you will essentially be lowering the loan amount and then amortizing the loan over 30 years again. This will have the effect of lowering the monthly payment on your mortgage.

Current Mortgage

Another requirement with this type of program is that you have to have a current mortgage. If your mortgage is in delinquent status, you will not be eligible for this program. If you have fallen behind on your mortgage, you will first have to address this issue with your lender and the FHA before you will be eligible to move forward with the FHA streamline refinance process.

Minimum Ownership Time

With this type of program, you are also going to have to meet minimum ownership requirements. With most lenders, you are going to have to have owned the property for at least 6 months before you can qualify for the FHA streamline refinance program. If you do not meet this requirement, you will have to wait until 6 months have passed before you can qualify for the program.

Closing Costs

With this type of loan program, you will also have to address the closing costs. You will need to pay for the closing costs upfront or you can find a lender that is willing to finance them into the loan amount.

 

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