FHA has permitted streamline refinances on insured mortgages since the early
1980's. The "streamline" refers only to the amount of documentation and
underwriting that needs to be performed by the lender, and does not mean that
there are no costs involved in the transaction. The basic requirements of a
streamline refinance are:
Lenders may offer streamline refinances in several ways. Some lenders offer "no
cost" refinances (actually, no out-of-pocket expenses to the borrower) by charging a
higher rate of interest on the new loan than if the borrower financed or paid the
closing costs in cash. From this premium, the lender pays any closing costs that are
incurred on the transaction.
Lenders may offer streamline refinances and include the closing costs into the new
mortgage amount. This can only be done if there is sufficient equity in the property,
as determined by an appraisal. Streamline refinances can also be done without
appraisals, but the new loan amount cannot exceed the original loan amount.
Investment properties (properties in which the borrower does not reside in as his or
her principal residence) may only be refinanced without an appraisal.
1980's. The "streamline" refers only to the amount of documentation and
underwriting that needs to be performed by the lender, and does not mean that
there are no costs involved in the transaction. The basic requirements of a
streamline refinance are:
- The mortgage to be refinanced must already be FHA insured.
- The mortgage to be refinanced should be current (not delinquent).
- The refinance is to result in a lowering of the borrower's monthly principal and
interest payments. - No cash may be taken out on mortgages refinanced using the streamline
refinance process.
Lenders may offer streamline refinances in several ways. Some lenders offer "no
cost" refinances (actually, no out-of-pocket expenses to the borrower) by charging a
higher rate of interest on the new loan than if the borrower financed or paid the
closing costs in cash. From this premium, the lender pays any closing costs that are
incurred on the transaction.
Lenders may offer streamline refinances and include the closing costs into the new
mortgage amount. This can only be done if there is sufficient equity in the property,
as determined by an appraisal. Streamline refinances can also be done without
appraisals, but the new loan amount cannot exceed the original loan amount.
Investment properties (properties in which the borrower does not reside in as his or
her principal residence) may only be refinanced without an appraisal.
- NO APPRAISAL REQUIRED
- NO INCOME VERIFICATION
- NO ASSET VERIFICATION
- LIMITED DOCUMENTATION NEEDED
- FAST AND SIMPLE PROCESS
FHA Streamline Quick Facts
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Advice and Timelines:
EST timeline to completion –
60-120 days.
***Depending on Servicer/Lenders
individual turn times.***
1. Any and all items requested from
your lender should be delivered
within 3 days! Many lenders will
cancel a file for inactivity if items
requested are not received by them in
a very timely fashion and you don’t
want to start over from the beginning.
2. Reference your loan number on
every document page during the
follow up process.
3. Update financials every 30 days
along with cover letter “Updated
Financials”.
4.Be diligent and patient.
EST timeline to completion –
60-120 days.
***Depending on Servicer/Lenders
individual turn times.***
1. Any and all items requested from
your lender should be delivered
within 3 days! Many lenders will
cancel a file for inactivity if items
requested are not received by them in
a very timely fashion and you don’t
want to start over from the beginning.
2. Reference your loan number on
every document page during the
follow up process.
3. Update financials every 30 days
along with cover letter “Updated
Financials”.
4.Be diligent and patient.
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