FHA has permitted streamline refis on insured home mortgages since the early 1980′s. The “streamline” relates only to the sum of certification and underwriting that asks to be executed by the loaner, and does not mean that there are no tolls involved in the dealing. The basic necessities of a streamline refi are:
The house loan to be refi must already be Federal Housing insured.
The house loan to be refinanced should be current (not delinquent).
The refi is to result in a taking down of the borrower’s annual principal and interest payments.
No cash may be made out on house loan refinanced using the streamline refinance process.
Lenders may offer streamline refinances in several ways. Some loaners provide “no cost” home refinance (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 lender pays any closing costs that are incurred on the home refinance.
Lenders may extend streamline home refinances and take on the closing costs into the new mortgage amount. This can simply be complete if there is enough equity in the prop, as determined by an appraisal. Streamline refi can also be done without estimates, but the new loan amount cannot pass the primary loan sum. Investment holdings (properties in which the borrower does not lodge in in as his or her key residence) may only be refinances without an appraisal.
Good luck on your streamline refinance , and make sure that you work with someone who understands the market and is FHA approved.