Simple FHA refinancing is a simple process. You can add closing costs and prepaid costs to the loan, as long as you don't make the loan exceed 97.75% of the value of the home based on a current appraisal. This makes the option good for people who don't want to pay out-of-pocket closing costs.
fha streamlinerefinance is a program that allows homeowners with FHA-backed mortgages to refinance with less time, hassle and paperwork.
With streamlined refinancing, you don't need to go through the FHA appraisal process again, as the FHA has already valued the property. The loan amount for your FHA Streamline is primarily determined by the outstanding principal balance on your loan, so if the value of your home has decreased, you may still be able to use an FHA Streamline to refinance. Let's take a look at the requirements you'll need to meet to qualify for refinancing with an FHA Streamline. The FHA offers several refinancing options, including a 203 (k) refinance for renewals and an FHA cash-out refinance, so it may require a little research and some calculations to determine which one best fits your needs now and in the future.
Calculating your long-term savings can help you decide if an optimized fha refinance is right for you. A simplified refinance that qualifies for credit requires your lender to perform a credit check, calculate your debt-to-income ratio (DTI), and assess your ability to continue paying your mortgage. You must have a history of timely mortgage payments on your current FHA loan to qualify for the FHA Streamline repayment. Exceptions can be made for simplified refinances that qualify for credit when changes must be made due to life changes, such as divorce or inheritance.
For applicants who don't qualify for credit, simplified FHA refinancing shouldn't affect your credit rating too much because your lender is considering fewer factors in your credit report. However, the FHA Streamline repayment program is only available to homeowners who have an existing FHA home loan. The simplified process can allow you to refinance without an appraisal, and perhaps also without income verification. The rules differ for optimized refinances that qualify for credit and do not qualify for credit, but in short, you need to have a history of timely mortgage payments.
Simplified FHA refinance is a mortgage refinance product through the Federal Housing Administration (FHA) that can help homeowners with an FHA loan lower their interest rate and monthly payment. You may be able to get an FHA optimization for a converted second home or investment property that is currently backed by an FHA loan.