How to Streamline Your FHA Loan: A Guide to FHA Streamline Refinancing

Do you have an FHA loan on your home, and you’re looking for a better rate? Before you go through the hassle of a standard refi, you’ll want to first see if an FHA streamline refinance is right for you.

This is a great option for homeowners looking to lower their mortgage payments, find a better rate, or improve their loan terms. Today, we’ll walk you through everything you need to know about the FHA streamline refinance and help you determine if you should pursue this option.

What Is an FHA Streamline Refinance?

An FHA streamline refinance is a type of mortgage refinancing that helps people with FHA loans change their rates, lower their monthly payment, or switch from an adjustable rate to a fixed one. As its name suggests, an FHA streamline is a simplified, seamless process compared to other refinancing options, and it doesn’t require as much documentation and has fewer hoops you have to jump through.

What does this mean?

Often, it can mean minimal underwriting, typically no appraisal, and less verification of your credit and/or income—in some cases, credit and income checks can be skipped completely.

How the FHA Streamline Process Works

So what does the process look like? While it can vary somewhat from lender to lender, the typical process will have the following steps:

1. You must already have an FHA loan for the home you want to streamline refinance.
2. Get in touch with a pro at Chris Doering Mortgage. We can help you determine if an FHA streamline refinance is a good choice for you and if you qualify.
3. Provide any necessary information and documentation. While there will be less need for documentation, some is still required. Our team is happy to walk you through the refinancing process and what’s required. Depending on the lender and your situation, the appraisal and certain underwriting requirements may be waived.
4. With everything in order, and once you’re approved, you’ll be able to enjoy the benefits of a mortgage refinance.
   

The Pros & Cons of FHA Streamline Refinance

There are many benefits to an FHA streamline refinance, some that we’ve already briefly discussed. The potential advantages include:

• A faster, easier refinancing process
• Less underwriting and appraisals for your home and your income
• A lower monthly payment
• A lower mortgage rate (FHA refinance rates fluctuate daily)
• Ability to change your loan term
• Switching from an adjustable rate to a fixed one
• You can still refinance your home even if you’re “underwater” on your mortgage (you owe more than your home’s worth)
• A partial refund of your initial FHA UFMIP

That being said, there are some disadvantages to this process as well. So you’ll have to decide whether the pros outweigh the cons.

• There may be closing costs, but they may be added to the loan itself.
• There is a $500 limit on the cash back you can receive on your home’s equity.
• It could require mortgage insurance like other FHA loans.

Is FHA Streamline Right for Me?

If you’ve decided that refinancing is a good decision for you and your situation, and you have an FHA loan, there are still some things you’ll want to consider before an FHA streamline. This program does have some requirements that you must meet:

• Your mortgage loan must already be FHA insured.
• You must have on-time mortgage payments for at least three months. One late payment is allowed within 12 months.
• There is a 210-day seasoning period. In other words, you must have closed at least 210 days ago and been making payments for six months.
• FHA streamline requires a net tangible benefit to you, the borrower (e.g., a new rate that’s at least 0.5% lower, shorter loan, or switching from adjustable to fixed).

If you do meet these requirements, the next step is to talk to a lender who will help you understand if this is a good decision for you.

Chris Doering Mortgage Helps You Find the Best Plan For You

At Chris Doering Mortgage, we’ve been helping Florida homeowners find the best mortgage terms for them and their families. From buying your first home to refinancing a mortgage, we’ve walked through it all. Our experts will guide you through your options. If you’re interested in lowering your mortgage payment or an easy loan term, get in touch with us today to discuss your refinancing options!