Should i streamline my fha

The new credit check could prove a better interest rate than opting for the no credit check streamlined process. Even without an FHA streamline loan, Feinman says some properties may qualify for an appraisal waiver, which can save the homeowner in closing costs. Those who have a newer home, improved credit, and would like to explore buying points to reduce the interest rate may want to consider a traditional refinance instead.

In most cases, to qualify for a prorated MIP refund you must refinance to another FHA loan within the first three years. In many ways the FHA Streamline Refinance program works similarly to other refinance options , but there are some key differences. It is designed to provide a financial benefit to current FHA borrowers, usually in the form of a lower monthly payment or by converting an adjustable interest rate into a fixed rate. It also has simplified qualification standards.

In lieu of a credit check and income verification you just need a track record of making on-time payments. You must have no late payments in the past three months. Individual lenders may have lending standards above these requirements and you could be denied for the loan with any late or missed payments. When you refinance under the FHA Streamline Refinance program you will still be required to pay the upfront mortgage insurance payment and an ongoing annual mortgage insurance premium MIP.

Most FHA loans will have an upfront fee of 1. You do have to pay closing costs with an FHA Streamline refinance. Unlike with other types of refinance loans, you cannot roll the closing costs into the new loan. When you take advantage of the FHA Streamline Refinance program, it does not remove the mortgage insurance payment from your loan. And in most cases, you will also be responsible for an upfront MIP of 1.

Instead, you must be up to date with your payments and have a history of on-time payments. There are FHA cash-out refinance loans available, but they have qualification requirements of standard refinance loans.

So you would need to meet the credit score and income guidelines. Your lender should provide you with a checklist of acceptable documents.

One of the biggest benefits is how much simpler the closing process can be. With no income verification or credit check required, you may be able to get your loan refinanced much more quickly.

Stay in the know with our latest home stories, mortgage rates and refinance tips. I would like to subscribe to the NextAdvisor newsletter. See privacy policy. The Marijuana Industry Is Booming. Mortgages Rates Dropped to 3. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.

The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories.

But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.

While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money. Founded in , Bankrate has a long track record of helping people make smart financial choices. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.

Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens.

We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Our goal is to give you the best advice to help you make smart personal finance decisions.

We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy.

You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. Bankrate follows a strict editorial policy , so you can trust that our content is honest and accurate. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.

We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories.

Note, the FHA Streamline cannot be used to refinance a year mortgage into a year mortgage. It can, however, be used to extend a year loan into a year loan. Doing this lowers monthly payments even further for homeowners.

But it also stretches out your interest payments, which means you could pay more with the longer term. Why would anyone choose the credit qualifying option and go through the full underwriting process? In other cases, qualifying for the loan all over again could save you money. If your credit profile has improved a lot since you got your original loan, you might qualify for an even better interest rate, for example.

But there are other benefits with this refinance program, too. For example:. Even if you owed twice what your home is now worth, FHA may allow you to refinance your home without added cost or penalty.

Lower mortgage rates mean lower monthly payments which, in theory, leads to fewer loan defaults. With fewer loan defaults, the FHA has to pay fewer insurance claims to lenders. In short, the FHA is helping itself when it helps you.

Which is why the requirements for the Streamline refi are so simple. Thirty days later, the refund drops to 58 percent. After another 30 days, it drops to 56 percent, and so on. Thus, eligibility for an MIP refund starts at seven months. With the FHA Streamline Refinance program, the sooner you refinance, the bigger your refund, and the lower your total loan size for your new mortgage.

Note that not all mortgage lenders will underwrite to the official guidelines of the Federal Housing Administration. Some lenders might enforce credit score minimums or other underwriting standards for FHA Streamline mortgages. Therefore, its number one qualification standard is that homeowners using the Streamline Refinance program must have a perfect payment history stretching back at least three months.

Homeowners with day, day, and day late payments are not allowed to use this refinancing option. One late mortgage payment is allowed in the last 12 months. Loans must be current at the time of closing. The FHA requires that borrowers make six mortgage payments on their current FHA-insured loan, and that days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.

For instance, say a homeowner has an FHA loan opened in May with a rate of 4. The homeowner looks into a Streamline Refinance, and receives a rate quote at 3.

The new combined rate would be 4. This FHA refinance would be eligible. Another allowable Net Tangible Benefit is to refinance from an adjustable-rate mortgage to a fixed-rate mortgage. This is considered a benefit because fixed-rate mortgages have predictable rates and payments that carry less risk of default.