|FHA Streamline Refinance aims at simplifying the documentation and underwriting requirements by a lender. It does not mean that there would be no costs involved in the process. Though you may find a program at an approved lender that advertises no closing costs, the fact is that it only allows you to close a transaction without requiring you to spend anything from your pocket. And this is possible at an interest rate that is higher than what is applicable when you close with a cash payment.
It is important to understand completely the features of an FHA Streamline Refinance program that comes with no credit check or without an appraisal worksheet. A streamline refinance option insured by the Federal Housing Administration can only be a good idea if you are fully aware of the pros and cons of the program currently being offered by the lender. A comparison of the streamline programs available at different approved lenders may help you decide upon the best option.
FHA Streamline Refinance Rates
When you compare the FHA streamline refinance programs available at different lenders give special attention to the actual interest rates that are likely to be applicable in your case. Bank of America, Chase and Wells Fargo are some of the biggest lenders in the country, so make it a point to check their refinance rates and compare these with the rates of other lenders.
To get a rate you might be comfortable with, you need to check the rates today section of their websites quite too often. Some of them may even offer assistance in this regard by automatically sending you alert messages once an interest rate matching your criteria becomes available.
FHA Streamline Refinance Guidelines
Information about the qualifications and various other aspects of a streamline refinance mortgage can be had from HUD guidelines which are contained in Handbook 4155.1 REV-4, Change-1, Paragraph 1-12.
As far as the eligibility requirements are concerned, your mortgage must be insured by the Federal Housing Administration and you must be current in your payment. Besides the refinance should result in a lower monthly payment and there is no cash out option.
The new rules regarding maximum loan amount vary according to the underwriting process, which may or may not involve appraisal or credit check. New guidelines have been issued regarding net tangible benefit, seasoning requirements, LTV and maximum loan amount. Appraisal is not required for an investment property.
For more information on issues like credit score, fees, fixed to ARM, income verification, MIP refund, UFMIP, manufactured home, rental and worksheet with or without an appraisal, refer to FHA streamline refinance guidelines.