FHA Streamline is a home loan program that was introduced by the Federal Housing Administration (FHA), and is designed for existing FHA customers. This type of refinancing is designed to speed up the home refinancing process. The way that this is accomplished is by relying on the paperwork from the original loan rather than recreating documentation and new underwriting.
FHA Streamline Mortgage Lenders in Boston, Worcester, and Peabody
The FHA Streamline Refinance is a special mortgage product reserved for qualified homeowners with existing FHA guaranteed mortgages. FHA streamline home loans may be the fastest, simplest way for FHA-insured homeowners to refinance their respective mortgages. The FHA Streamline home loan program’s defining characteristic is that there is a limited amount of documentation and underwriting that the lender must perform and it may not require an appraisal.
Massachusetts FHA Streamline Home Loans
One of the most significant features of FHA streamline refinancing is that no appraisal is required. In addition, in some cases, borrowers may not need to provide income, employment or credit verification. That said, there are a number of rules when it comes to FHA streamline loans. For example, the refinance must result in a net tangible benefit to the borrower. The definition of net tangible benefit varies based on the type of loan being refinanced, the interest rate, the term of the new loan and the jurisdiction where the property is located. Cash in excess of $500 may not be taken out on mortgages refinanced using the streamline refinance process. Applicants must be current on their existing mortgages, and are only allowed one late payment within the previous year. There is a waiting period of six months on an existing FHA mortgage before the buyer can apply for a streamline reference. Finally, the streamline financing cannot result in an increased loan balance.
As FHA streamline mortgage lenders in Boston, Worcester, and Peabody, we can provide certain benefits to the borrower as well. In many cases, adjustable rate mortgages can be risky as interest rates spike. Many buyers get drawn into these loans with so-called “teaser” sub-prime interest rates, but then when the interest rates are adjusted, monthly payments can skyrocket, and FHA streamline refinancing may be the solution to make the loan more affordable to the borrower. FHA does not require repairs to be completed on streamline refinances with appraisals, with the exception of lead-based paint repairs. However, the lender may require completion of repairs as a condition of the loan. One consideration with all FHA loan programs is the mortgage insurance charged by the FHA, because FHA mortgage insurance premiums are required to be paid upfront and on an annual basis. Mortgage insurance rates are set by factors that cannot be controlled by borrowers or loan officers.