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| 301 E Palestine Ave |
| Palestine, TX 75801 |
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| Phone: 903-729-7865 |
| Fax: 903-731-4103 |
| Toll Free: 866-729-7865 |
| Map and Directions |
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In the DFW Area
Frisco: 214-673-9678
Irving: 214-912-0648 |
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| Streamline Refinancing for FHA Mortgages |
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FHA has permitted streamline refinances on insured mortgages since the early 1980's. The streamline refers only to the amount of documentation and underwriting that needs to be performed by the mortgage company, and does not mean that there are no costs involved in the transaction.
The basic requirements of a streamline refinance are:
- The mortgage to be refinanced must already be FHA insured
- The borrower must have been making the mortgage payments on time for the past 12 months.
- The refinance must lower the principal and interest payment of the previous mortgage payment
- The borrower may not receive cash from loan proceeds
- Any subordinate financing may remain in place as long as it is subordinated on title.
- The loan must have owned the property and had the FHA mortgage for at least six months to be eligible
- The term of the new mortgage must be the lesser of 30 years or the unexpired term of the mortgage plus 12 years. A borrower cannot refinance from a 15 year loan to a 30 year loan.
- An appraisal is not required unless the closing costs are wrapped into the loan. Streamline refinances without an appraisal are limited to the unpaid principal balance, minus any refund credit of the mortgage insurance premium (MIP), plus the new upfront MIP if it is to be financed in the mortgage.
- The new monthly principal and interest payment cannot increase by more then $50. If the monthly principal and interest payment increases by more than $50, full credit and income qualification is required.
- No termite report is required
- The borrower cannot be late, delinquent, or in default of any federal debt.
Companies may offer streamline refinances in several ways. Some companies offer "no cost" refinances (actually, no out-of-pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the company pays any closing costs that are incurred on the transaction.
Companies may offer streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, as determined by an appraisal. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed what is currently owed, i.e., closing costs may not be added to the new mortgage with those costs either paid in cash or through the premium rate as described above. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal and, thus, closing costs may not be included in the new mortgage amount. |
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| Licensed Under the Texas Mortgage Broker License Act |
| Mortgage Broker Recovery Fund & Consumer Complaint Notice |
| © 1991-2008 Mortgages & More, Inc. |
| By Griffin Networks, Inc. |
