Do you have a loan insured by FHA prior to May of 2009? Are you looking for a low, low interest rate as low as 3%? Please feel free to read more or apply now or read on for more info.
There is a new version of FHA’s streamline refinancing program, which essentially is meant to reduce the total payments for FHA mortgage borrowers; reducing the rate and payment would obviously be beneficial and support the households of many Americans in this present economic climate. What’s cool is that a Streamline Refinance insured by the FHA is much easier to qualify for than it would be to qualify for a standard FHA loan.
What are the main benefits and features of this new FHA Streamlined Refinance?
FHA Refinance Streamline’s do not require an appraisal will. In addition to this the income ratios will not be calculated for an FHA streamline refinances and at the same time the minimum credit scoring ceases to be a requirement and you might be able to skip one mortgage payment and the lender fees are should be covered and paid for. New impounds will be collected at the banks expense and you’ll receive a refund of the currently impounded escrows
In order to qualify for the FHA Streamline Refinance you must be a homeowner with a currently existing FHA loan. This would be the best example of a possibly eligible candidate for the FHA refinancing process as long as they meet certain criteria. For example:
The FHA Net Tangible Benefit must be met
- FHA has established a “net tangible benefit” test; essentially this is meant to ensure that borrowers are not tricked by lenders who misrepresent the reason behind the refinance or when the benefit is too small.
As an example we can see that the Federal Housing Administration requires that a borrower who refinances from one 30 year loan to another (both fixed loans), then they must reduce the payment by a 5% minimum. In other words the new payment in addition to the new FHA MIP shall be at least 5% lower than the amount that the borrower is currently paying. This 5% reduction is not the only test that the FHA performs as a net tangible benefit in reference to Streamline Refinance; a tangible benefit could also be considered as refinancing an FHA ARM.
- Six payments must have taken place or 210 days before beginning to a new FHA Streamline Refinance. Nevertheless, it is not required to wait for such a period in order to be approved.
- Closing costs are not permitted by FHA to be included on behalf of the borrower into the streamline loan. Given that FHA does not require an appraisal, the growth of the loan is undesired. Including these settlement costs would require a standard FHA refinance. But The Brandon Roberts Group will cover the cost to close for nearly all clients.
Mortgage Rates – FHA Streamline Refinance
The interest rates will depend on the market variations that also influence any other mortgage rates; FHA does not have control nor does it set interest rates. In order to assure that you obtain the lowers possible interest rate in the market, your lender must comprehend the hundreds of variables that have a direct or indirect influence in the market. The average loan officer who will make your loan is ill-equipped and ill educated to comprehend these necessities.
Your FHA loan MUST be Completed, Origination and Insured before June 1st, 2009
If your FHA mortgage was insured by HUD before June 1st of 2009, then you are eligible for this refinance and a significantly reduced monthly mortgage payment however you are not eligible for a UFMIP refund, since these are eligible for refinances within the first three years only. In spite of this, loans insured by FHA before the June 1st, 2009 will have reduction in the UFMIP to .01%, and the Monthly MIP (Mortgage Insurance Premium) will remain at the standards before June 2009 (0.55%).
For loans granted after the June 1st date, there is no good news, since the net tangible benefit on behalf of FHA is very difficult to obtain with significantly increased monthly mortgage insurance (1.25%)
It could be beneficial for you to eliminate the FHA loan and refinance into a traditional loan if you have accrued equity; now days the insurance provided to private mortgages has a lower cost than FHA insurance. Call to compare FHA and traditional loans if you obtained 660 or 669 on the FICO score. FHA only requires a 640 score to refinance.
There are specific other guidelines that must be followed to qualify for the Expanded Criteria Program, including:
- At least a 2 year dismissal since the last bankruptcy.
- Mortgage lates are acceptable.
- Maximum loan to value of 80 percent (20% down)
- Maximum debt to income ratio or 43 percent.
- No lender points available.
- Conventional Rates making this superior to hard or private money.
If you would like to see if you qualify please visit our page here scroll down to the life after foreclosure segment and take our pass fail test and get an immediate response.
For more information on if you can qualify for the Expanded Criteria Program, contact Brandon Roberts in Murrieta, California. With over 18 years of experience in nontraditional mortgages and jumbo loans, I will work with you to ensure that you are able to purchase again the home of your dreams, no matter what your specific situation is.