FHA has granted streamline refis on insured mortgages since the early 1980’s. The “streamline” pertains only to the amount of documentation and underwriting that needs to be executed by the loaner, and does not mean that there are no tolls involved in the dealing. The standard prerequisites of a streamline refinance are:

The house loan to be refinanced must already be FHA insured.

The mortgage to be refinanced should be current (not delinquent).

The refi is to effect in a taking down of the borrower’s annual principal and interest payments.

No cash may be made out on house loan refinanced using the streamline refinance process.

Lenders may extend streamline refinances in several ways. Some lenders provide “no cost” refinances (actually, no out-of-pocket expenses to the borrower) by billing a higher rate of interest on the different 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 home refinance.

Lenders may provide streamline refinances and take on the closing costs into the new mortgage total. This can simply be done if there is decent equity in the place, as seen by an appraisal. Streamline home refinance can also be done without estimates, but the different loan number cannot exceed the original loan sum. Investment properties (properties in which the borrower does not lodge in in as his or her key residence) may only be home refinance without an assessment.

Good luck on your streamline refinance , and make sure that you work with someone who understands the market and is FHA approved.

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