If you currently have an FHA loan, you may be able to reduce the interest rate on your current home loan quickly and easily with this type of refinancing. While you'll still need to complete an application, employment verification, and debt-to-income analysis, this refinancing does not require proof of income, verification of funds, or a credit report-although the lender may require these for loan pricing purposes. In many cases, these type of refinancings can be completed without an appraisal.
Below are the requirements for this type of refinancing:
Must be a homeowner who currently has an FHA insured mortgage. If you're not sure whether your mortgage is an FHA loan, review your original loan documents to see if there is an FHA case number listed. (Typically, the FHA case number will be listed below the escrow information, on your appraisal, or at the top of your mortgage loan document.)
Must be current on existing mortgage with all payments made on time and in full for the last year.
Must own the property for at least six months.
Must refinance with an FHA-approved lender.
Loan amount cannot exceed your current loan without an appraisal.
You must pay closing costs up front. You may choose a "no cost" FHA Streamline loan, or opt to fold closing costs into your loan if you have enough equity in your home to cover the added cost (requires an appraisal).
If you are considering this type of refinancing, keep in mind that while the lender must be FHA-approved, each lender will vary according to the interest rate and terms offered, fees charged, closing costs, and other requirements. Shop around to find the lender with the most favorable conditions, and weigh all options before making a final decision. Remember, just because an FHA Streamline Refinance yields quick results doesn't mean the process should be taken lightly.