FHA Streamline Refinance: Simplifying the Process
Learn how the FHA Streamline Refinance Program can simplify refinancing your FHA loan. All the details you need to understand and consider the program are covered in this comprehensive article.
What is FHA Streamline Refinancing?
The FHA Streamline Refinance program is a way for existing FHA borrowers to take advantage of low interest rates and reduce their monthly payments without the requirement of an extensive paperwork and credit check process. This type of refinance requires minimal documentation and can invite quicker closing than a traditional mortgage refinance.
Benefits of FHA Streamline Refinancing for Homeowners
For homeowners who qualify, FHA Streamline Refinancing can provide numerous benefits. Homeowners can take advantage of the current low mortgage rates, reduce their monthly payments, shorten the maturity of their loan, and eliminate the need for expensive private mortgage insurance. For those in need of cash, this option can also help the homeowner borrow against their home's equity.
Who Qualifies For FHA Streamline Refinancing?
Not everyone may qualify for the FHA Streamline Refinance program. Generally, homeowners who meet the following criteria may be eligible:
- The homeowner must currently have an FHA loan.
- The loan must be current, with no more than one 30-day late payment in the last 12 months.
- The loan must have been closed at least six months prior to the application.
- The homeowner must demonstrate timely payment of their mortgage for the past 12 months.
- The homeowner cannot have taken out an FHA loan in the past 12 months.
- The property must be the borrower's primary residence.
The Streamline Refinancing Process
The FHA Streamline Refinance process is quite simple. Once you have been approved by your lender, the process involves submitting the necessary paperwork and documentation. This includes your loan application, proof of income, and a property appraisal. The lender will then review your documents and submit the paperwork to the Federal Housing Administration for approval.
Once the paperwork has been submitted to the FHA, the loan typically can be completed in a few weeks. Unlike the process for a traditional mortgage, you will not need to provide verification of employment or tax returns and there will not be as extensive underwriting process. However, in some cases a borrower may be required to provide additional paperwork prior to closing the loan.
Conclusion
For many homeowners, the FHA Streamline Refinance program provides an attractive option. This program can help existing FHA borrowers save money and take advantage of current low mortgage rates. As long as you meet the FHA Streamline Refinance criteria, the process is quick and simple with little paperwork.