Simple refinancing refers to a cashless refinancing of an existing FHA-insured mortgage, in which all proceeds are used to pay existing FHA-insured mortgage liens on the property in question and the costs associated with the transaction. Simple FHA refinancing allows homeowners to move from their current FHA loan to a new one, either a fixed-rate loan or an ARM. This refinance is the easiest and there is no cash-out option. With a simple FHA refinance, homeowners with a current FHA loan can refinance and convert it to a new one, either a fixed-rate loan or an ARM.
Simple refinancing has no cash-out option and is the simplest; lenders require a credit rating, which is the process of analyzing credit, income, and assets to ensure the borrower meets the requirements of the new loan terms. There is also a home appraisal, to assess the current value of the home. With a simple FHA refinance, the new loan amount can include all closing costs and prepaid items, as long as the amount is within the appraised value. A simple refinance is a rate and term refinance of an existing FHA mortgage that allows you to include closing costs in the loan amount.
Simple refinancing requires credit rating, full income and employment documentation, and a home appraisal. 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.
The Carrington Mortgage Services, LLC FHA Simple Refinance Program is a cashless option for existing FHA-insured home refinance loans. No 6 full payments required (210 day requirement) as with a typical FHA simplified loan. Carrington has the loan programs and services that allow you to deliver to your borrowers with credit problems. The FHA Streamline is a special refinancing program reserved for homeowners with existing FHA mortgages.
An FHA Streamline is the quickest and easiest way for FHA-insured homeowners to refinance their mortgages with today's low mortgage rates. If you currently have an FHA mortgage, simplified FHA refinancing is the easiest way to get a lower rate and monthly payment. While minimal documentation is required to refinance with an FHA Streamline, you will likely need to provide some forms for your refinance request. The big benefit of an optimized FHA refinance is that you can change your FHA loan at a lower rate and monthly payment.
FHA Optimized Refinance rates change frequently and may differ between borrowers, so it's a good idea to compare current rates. Although conventional loan rates are slightly higher, your mortgage insurance payments can be much lower than those for an FHA loan. If you use Streamline Refinance that qualifies as FHA credit, you will need to “re-qualify” with your income and credit rating. If your current lender requires a home appraisal or income verification, you are free to seek a more lenient lender that meets the FHA minimum guidelines for Streamline refinancing.
An FHA cash-out refinance is an option for both existing FHA loan borrowers and conventional loan borrowers looking to collect an FHA loan. The FHA does not allow you to include closing costs in the balance of your new loan in an optimized FHA refinance. You must have a history of timely mortgage payments on your current FHA loan to qualify for the FHA Streamline repayment. The FHA also requires three months of on-time payments and a waiting period of 210 days from the last closing date of your home (either purchase or refinance).
Another big plus is that it's quite easy to get an FHA Streamline Refinance loan, especially the type that doesn't qualify for credit. A Streamline loan is designed to simplify, so you can avoid most of the extra steps that cash loans require. 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. .