Section 3: FHA Streamline Loan Benefits
FHA Streamline Loan Benefits
The FHA Streamline Refinance program gets its name because it allows borrowers to refinance an existing FHA loan to a lower rate more quickly. Avoiding a lot of paperwork, and often without an appraisal, the Streamline option saves borrowers time and money.
1. Interest Rate
You can reduce the interest rate on your current mortgage without a full credit check, yet you need to have paid your mortgage on time over the last 12 months.
2. Income Verification
There is no requirement for income verification.
3. Reduced Paperwork
FHA Streamline loans have reduced paperwork, simple requirements for eligibility, and a list of features which makes it very attractive for borrowers
4. Debt-to-Income
If you have an existing FHA mortgage, you've already proven you are a good credit risk for an FHA-guaranteed loan. Because of this, you don't need to calculate a debt-to-income ratio for the new FHA Streamline loan, but it's always a good idea to have a second look at your finances for your own information.
5. Net Tangible Benefit
The FHA actually requires that there be some advantage for the borrower if they go ahead with a Streamline Refinance. If refinancing makes it easier for you to make your monthly payments on time, then the FHA is off the hook for reimbursing your lender in the case of you defaulting on your mortgage. For a reduction in the term of the mortgage to be considered a net tangible benefit, certain things must apply. The remaining amortization period of the current mortgage bust be shortened, the new interest rate should not exceed the original one, and the principal, interest, and MIP payment of the new mortgage must not exceed the combined amount of the existing mortgage by more than $50.
6. PMI
An FHA Streamline Refinance can help homeowners lower their annual mortgage insurance premium (MIP) or even get a partial refund of their upfront MIP payment.
7. Credit
A standard minimum credit score for the FHA streamline refinance program is 640. However, some lenders may allow a score between 600-620.
8. Appraisal
In many cases, you can refinance with FHA Streamline without a new appraisal on your home. More lenient credit requirements to refinance compared to most other loans.
9. Assumability
According to the Department of Housing and Urban Development (HUD), all FHA-insured loans are assumable if the new borrower can qualify for the loan and the existing loan has no restrictions placed on it.
Common Questions on FHA Streamline Loans
- Are FHA Streamline loans better?
Everyone has unique needs for their buying situation. Although FHA Streamline loans are very competitive, they are not always the best choice for the consumer. Because of that we recommend you talk to your loan professional for your specific needs.
- Are there any benefits to sellers?
FHA Streamline loan l loan buyers have the lease restrictions when it comes to buying and is typically a sought-after product when looking at offers.
- What are Orbit Realty’s and Orbit Home loans benefits?
With Orbit Realty you and Orbit home loans you get the benefit of working with a team that is highly trained and qualified. Okay, maybe every company says they have that, but the truth is that only 10% of companies nation-wide have both a real estate and mortgage company combined and because of that we are able to be one of the most competitive lenders on the market. We are also able to pass savings onto you buy not having to change additional fees that you often see with other lenders.
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