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    Email: joe@joemetzler.com

  • The FHA Streamline Refinance

    If you currently have an FHA mortgage, you are eligible for one of the simplest money saving refinances available today. The FHA Streamline Refinance allows existing homeowners with an FHA loan to refinance and reduce their interest rate without having to jump through as many hoops as normal. The best item is no appraisal required in most cases, and closing costs are rolled into the new loan, so most people can get one no, or next to no out of pocket costs. How cool is that?

     Apply online right now to get started on your FHA Streamline Refinance

    FHA has permitted streamline refinances on insured mortgages since the early 1980's. The streamline refers only to the amount of documentation and underwriting that needs to be performed by the mortgage company, but does not mean that there are no costs involved in the transaction.

    The basic requirements of a streamline refinance are:

    • Borrower's original loan must already be an FHA insured loan.
    • The refinance must lower the principal and interest payments of the previous mortgage payment by 5% or more.
    • No cash may be taken out on mortgages refinanced using the streamline refinance loan (you can with a regular FHA refinance)
    • The mortgage to be refinanced can not be delinquent. The mortgage must have been paid as agreed for the last twelve (12) months and must be up to date at the time of refinancing.
    • Borrower must have had the FHA mortgage for at least 6 months.
    • Borrower cannot receive any cash back (but you can with a regular FHA refinance)

    In theory, No income or employment verification needed.  No pay stubs or W-2 forms required for the program, but some states (like MN have state requirements, and require income documentation).

    An Appraisal IS required if rolling the closing costs into the loan amount, but NOT if rolling the closing costs into the interest rate.

    Streamlines without an appraisal refinances are limited to the unpaid principal balance, minus any refund credit of the mortgage insurance premium, plus the new upfront MIP if it is to be financed in the mortgage.

    Any other liens (2nd mortgages, home equity loans) must be subordinated to the FHA loan.

    Borrower must be up-to-date on any federal debts.

    We offer streamline refinances in numerous ways. You can select a no closing cost refinance, (which should really be called a no out-of-pocket cost refinance) by selecting a slightly higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this slightly higher interest rate, the lender pays any closing costs that are incurred on the transaction. This is how 95% of FHA streamline refinances are done.

    Mortgage companies can also offer streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, as determined by an appraisal. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed what is currently owed, i.e., closing costs may not be added to the new mortgage with those costs either paid in cash or through the premium rate as described above. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal and, thus, closing costs may not be included in the new mortgage amount.