FHA Streamline Refinance
The FHA Streamline Refinance is an older FHA loan program that lowers the amount of documentation and underwriting on the lenders part. Lending costs are still inquired as with a normal Texas FHA Loan. The requirements of streamline refinancing include:
- Having already an insured FHA mortgage
- The mortgage should not be delinquent
- Lenders are not permitted to cash-out on refinanced mortgages using this program
- FHA refinancing will lower both the lenders monthly payment from principal and interest rate
A lender may streamline an FHA loan including the closing costs with the new amount. For this to occur, an FHA appraisal is necessary to determine the equity in the property. Without an FHA appraisal a loan streamline refinancing cannot exceed the amount currently owed – closing costs can rather be paid in cash.
Another way of streamline refinancing may including ‘no cost’ refinancing where a higher interest rate lower than the current rate is given. This way the closing cost is not cashed or financed but included in financing the interest rate. For this premium, the investor credits most or all of the closing costs incurred during the streamline mortgage refinance process.
Properties in which the lender doesn’t reside in as a first home will only be partake in the streamlining process without an appraisal. Closing costs are therefore not included in the mortgage amount as a result. Also, the new amount cannot be more than the highest loan amount for the property type in that location.
If you currently have a Texas FHA loan, you can check for guidelines on the FHA streamline refinance program on the website.
