FHA has allowed streamline refis on insured mortgages since the early 1980’s. The “streamline” relates simply to the total of documentation and underwriting that asks to be executed by the loaner, and does not mean that there are no tolls required in the transaction. The standard necessities of a streamline refinance are:
The mortgage to be refi must already be FHA insured.
The home mortgage 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 extend streamline refinances in several ways. Some lenders provide “no cost” refinances (actually, no out-of-pocket expenses to the borrower) by billing a higher rate of interest on the different 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.
When you want to get an FHA loan on, yet make sure that you’re working with someone who knows the FHA streamline market and is easy to work with.