FHA Mortgage Blog

Few Winter Haven, Florida mortgage borrowers know this, but the Federal Housing Administration – or FHA – has allowed streamline refinances on FHA mortgages since the early 1980s.

The word “streamline” refers to the fact that this particular form of home loan refinance involves a significantly smaller amount of red tape and paperwork than most typical refinances.

The basic requirements of the FHA streamline refinance are:

• The mortgage which is to be refinanced should be FHA insured.
• The mortgage which is to be refinanced should be recent and not illegal.
• The refinance is to conclude with lessening the borrower’s interest payments and monthly principal.
• No money can be drawn on refinanced mortgages through the streamline refinance method.

Benefits of the FHA Streamline Refinance

• Evaluation is not usually required
• Paperwork involved is minimal
• No income verification, credit check, underwriting fee or employee verification
• Easily decrease or increase the period of the term of the existing loan
• Enjoy benefits of existing low interest rates
• Very little, or even zero, other expenses involved

Winter Haven home owners who opted to go with FHA Streamline Refinance did so because the refinance is available with zero out-of-pocket expenses.

This zero-out-of-pocket option takes place in one of the following two ways:

1. The expenses, if any, can be covered by the lender in return for a bit higher interest rate.
2. Alternatively, the expenses may be added to the new loan, provided the property has enough equity to cover the additional amount.

Lenders handle FHA Streamline Refinance mortgages in different ways…

Out-of-Pocket Mortgage Costs Covered by Increasing the Interest Rate

Few lenders give “no cost” refinances i.e. zero out-of-pocket costs to borrowers. This is done by increasing the interest rate slightly on the loan. With this premium, your mortgage lender will typically cover any closing costs required as part of the transaction.

Out-of-Pocket Mortgage Costs Covered by Increasing the FHA Mortgage Amount

Lenders may allow borrowers to pass on paying out-of-pocket expenses by folding the closing expenses into the next mortgage value. This is done only if there is enough equity in your property, as determined by the FHA assessment.

Remember, FHA Streamline Refinances may be done without an appraisal, but in these cases – the new loan value must be the same as the original loan value.

Note: Investment properties (i.e. properties where the borrower does not stay in her or his principal residence full-time) can be refinanced via the straight FHA Streamline Refinance process only. In these cases, out-of-pocket expenses must be paid by the borrower.

Interested in an FHA Streamline Refinance? Call me at 863-604-3019 or apply online, and we’ll get you set up!

Kevin Sandridge The Florida Mortgage Pro Signature Home Funding 410 Laurel Cove Way Winter Haven, FL 33884

Mobile: 863-604-3019 Fax: 888-496-0265 Email: kevin.s@sigfunding.com http://www.floridahomeloanspecialist.com