If you have an FHA loan in Eugene/Springfield, OR you can get a lower rate with a FHA “Streamline” refinance with very little documentation or cash out of pocket. In this process, about all you had to do was prove you were current on your mortgage and a majority of the closing costs could be included in the new loan amount. That all changes 60 days from Friday with the new rules for the FHA “Streamline” refinance program though their mortgagee letter #2009-32. Surprisingly, FHA actually wants you to be able to make your payment too. (LOL) So, they want proof that the borrower is employed and has income.
The most important item (in my opinion) having to do with the “Streamline” without an appraisal refinance has to do with the new maximum mortgage amount. Previously, the maximum loan amount was calculated on the previous loan amount and some of the closing costs could be included in the new loan amount and make a lower rate available, but the new maximum is based on the current loan principal balance minus refund of current UFMIP (upfront mortgage insurance premium) plus the new UFMIP.
That means that the borrower will either have to bring in the closing costs (which source must be verified) or the interest rate will have to be increased to help pay the closing costs, a harder process in today’s market place. Additionally, the impound account for taxes and insurance will need to be included in the money brought in for closing.
Anyone contemplating a “Streamline” refinance in Oregon should probably look at October – December as the best time to do it for the least out of pocket costs, since taxes are paid in October and the amount needed for a new impound account will therefore be less. There are several other changes in the rules governing the process. If you want to read them all, go to this link.
A no appraisal “Streamline” may still be an excellent product for you, however you won’t know unless you check it out. Give me a call at 541-342-7576/541-221-3455 Cell or e-mail me for an appointment. The changes outlined in the FHA mortgagee letter will take place for new applications in mid-November.
