There’s good news for homeowners with FHA backed mortgage loans. Today the FHA changed the qualifications to allow more homeowners to be approved for the FHA streamline refinance. If you’ve got an FHA backed home loan and have been wanting to take advantage of the lowest refinance mortgage rates in 60 years, you can now qualify with no credit check, income OR employment verification. Here’s what you need to know about the changes the government is making to the FHA streamline refinance program.
What is the FHA Streamline Refinance?
The FHA Streamline Refinance is for homeowners with FHA backed home loans. The program is intended to be an almost paperless mortgage refinancing with minimal closing fees. The program is available to any FHA homeowner regardless of where you live in the United States.
FHA Streamline Requirements
It’s much easier to qualify under the new program than it is for traditional mortgage refinancing.
To qualify under the new FHA rules you must:
- Be at least six payments into your FHA backed home loan.
- Cannot have any late payments going back twelve months.
- Must have a reason for mortgage refinancing (like lower your rate or switch interest rate types)
That’s it! You don’t have to qualify based on income, credit, employment or loan-to-value ratio. Since your loan-to-value ratio isn’t part of the equation you won’t have to pay for an appraisal either. It won’t matter if you have 300% LTV or worse and you’ve been laid off your job. As long as you’ve kept your payments current you’ll qualify for the FHA streamline refinance.
What’s the FHA Role In All This?
If this sounds like a scam to you or just too good to be true, remember that the FHA does not make home loans, they simply insure them. You’ll still have a bank or mortgage lender just like your non-FHA insured neighbors, meaning you’ll be required to pay fees as part of the process.
Overpaying the mortgage loan origination fee or other closing costs diminishes the benefit you get from refinancing because it will take longer to recoup your out-of-pocket expenses from your lower payment amount. The less you pay, the faster you’ll break even.
You can learn more about paying less for mortgage refinancing by avoiding unnecessary lender fees by checking out my free Underground Mortgage Videos.