| eamline refinancing is much simpler and faster than | | | | calculations: |
| any other type of refinance due to the fact that little | | | | 1. Maximum LTV(Loan-to Value) percentages multiplied |
| documentation is required. There is no need for a new | | | | by appraised value, excluding closing costs. |
| appraisal or full credit report as long as the amount | | | | 2. Sum of existing FHA first mortgage, accrued late |
| being refinanced is not more than the original loan | | | | charges, prepaid expenses needed for the escrow |
| amount. This is what makes streamline refinancing a | | | | account, escrow shortages, closing costs and |
| valid choice for FHA first mortgage holders. | | | | reasonable discount points minus any upfront MIP |
| Basic Requirements For An FHA Streamline | | | | refund. |
| Refinance | | | | Without an appraisal, the maximum insurable mortgage |
| -Mortgage being refinanced must already be FHA | | | | amount is calculated by the lesser of the following: |
| insured | | | | 1. Original loan amount with any upfront MIP and new |
| -The mortgage being refinanced may not be delinquent | | | | UFMIP charges included. |
| -Borrower's monthly payment must be lowered | | | | 2. Existing debt calculation, which is the same as |
| -No cash out | | | | number 2 above but also includes the expense of the |
| There are certain things that need to be taken into | | | | new up-front UFMIP. |
| account when doing an FHA streamline refinance. First | | | | There are a couple of ways in which lenders can |
| of all, the mortgage being refinanced already has to be | | | | offer an FHA streamline refinance to a borrower. |
| an FHA approved first mortgage. There is no cash out | | | | -No Cost Refinances- No out of pocket expenses to |
| allowed by the borrower, and the purpose of the | | | | the borrower. All expenses are paid by the lender. This |
| refinance is to simply lower the borrower's monthly | | | | will likely result in a higher interest rate than if the |
| interest and principal payment. To provide for closing | | | | borrower had paid the expenses out of their own |
| costs, there may be a minor adjustment in the no cash | | | | pocket. |
| out clause allowing up to an additional $500 above the | | | | -Closing Costs Included In New Mortgage Amount- If |
| original loan amount. | | | | there is sufficient equity in the property as determined |
| The only repairs that are required to be completed | | | | by an appraisal, then the closing costs can be included |
| when doing an FHA streamline refinance are those | | | | in the new loan. This can also be done without an |
| that deal with lead based-paint. If the lender requires | | | | appraisal as long as the new loan amount does not |
| any other repairs to be completed by the borrower | | | | exceed the original loan amount. |
| they must be paid for out of the borrower's pocket. | | | | While actual fees and rates may vary depending on |
| FHA streamline refinances don't require an appraisal, | | | | the lender you choose, the basic requirements of a |
| but in cases where an appraisal is done, the maximum | | | | streamline refinance will be the same. Using an FHA |
| insurable mortgage is figured out differently. | | | | streamline refinance program may be the easiest and |
| Calculating the maximum insurable mortgage amount | | | | fastest way for any FHA first mortgage borrower to |
| with an appraisal is the lesser of the following two | | | | refinance their existing loan. |