Streamline Refinance

The mortgage term “streamline” refers only to the amount of underwriting & documentation required by the FHA mortgage company. HUD has permitted FHA streamline refinances on FHA insured mortgages since the early 1980’s.

The basic requirements of an FHA streamline refinance are:

The home loan to be refinanced must already be FHA insured.
The home loan to be refinanced should be in a current status, and not delinquent.
The new mortgage is to result in a lowering of the borrower’s monthly P&I payments.
No cash out on mortgages refinanced using the FHA streamline refinance process.

A FHA mortgage lender may offer FHA streamline refinances in several ways. Some FHA Lenders offer “no cost” mortgage refinances. This is done by charging a higher interest rate on the new FHA mortgage loan. This yield spread premium is used to pay any fees or closing costs that is related to the mortgage transaction. Also, the FHA lender may include the fees or closing costs into the new FHA mortgage loan. This is done by using the equity in the home, and is also subject to loan to value approval. FHA Streamline refinancing can also be done without performing an appraisal. The new FHA loan amount may not exceed the current principal balance.