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FHA Streamline Refi program? The easy ones are almost over.On Nov. 17 FHA changes to new guidelines for its most popular FHA-to FHA streamline refinance program. The approval process is about to become harder and more expensive. There are three main parts that will change in the middle of November for the Streamline program.
1. FHA homeowners must now be employed when the application is taken.
2. FHA homeowners will have to prove there income.
3. FHA homeowners that want to roll closing cost into the loan must now have their homes appraised .
Presently, all you have to do to Streamline Refi your FHA loan is apply and you can roll your cost into the loan without an appraisal. The main point was to help the homeowner by lowering the monthly payment. The fact of not having a job or having your hours cut was not important. If you have been making your payments on time, FHA would just do the refinance. That is all about to change.
For those in homes that have seen a decline in value, you may not be able to refinance under the new rules. Starting Nov. 17 underwriters will decline loans if you do not have a job, and/or your home has gone down in value to the point that you owe more than it is worth. Currently, you can get a streamline refinance that will lower your payments and include the closing cost into the loan. Not so next month.
If you or someone you know as a FHA loan, then you need to check into streamlining that loan now before the changes take place and the cost go up. No is needed appraisal today; however tomorrow you will have to have one which will add to the cost and time it takes to refinance your home. So what do you do? You get a quote today based on current guidelines. Do not worry about the costs, make sure you are saving money every month. $100 a month is $1,200 a year this a big savings and will add up over time. This is extremely important for those that have seen a decline in income or may be unemployed at this time.
FHA Streamline changes
Old Streamline New Streamline
No Appraisal Appraisal Advised
No Maximum LTV 97.75% Max LTV
Unverified Income Income Verified
Unverified Assets Assets verified
Low Credit scores Higher credit scores
Large Lender Pool Fewer Lenders
Quick Closing OK No quick closing
Paul Clement is the senior loan officer at LeaderOne Financial. If you or any of your friends have questions or comments about mortgage or credit e-mail Paul at paulclement@leader1.com.
1. FHA homeowners must now be employed when the application is taken.
2. FHA homeowners will have to prove there income.
3. FHA homeowners that want to roll closing cost into the loan must now have their homes appraised .
Presently, all you have to do to Streamline Refi your FHA loan is apply and you can roll your cost into the loan without an appraisal. The main point was to help the homeowner by lowering the monthly payment. The fact of not having a job or having your hours cut was not important. If you have been making your payments on time, FHA would just do the refinance. That is all about to change.
For those in homes that have seen a decline in value, you may not be able to refinance under the new rules. Starting Nov. 17 underwriters will decline loans if you do not have a job, and/or your home has gone down in value to the point that you owe more than it is worth. Currently, you can get a streamline refinance that will lower your payments and include the closing cost into the loan. Not so next month.
If you or someone you know as a FHA loan, then you need to check into streamlining that loan now before the changes take place and the cost go up. No is needed appraisal today; however tomorrow you will have to have one which will add to the cost and time it takes to refinance your home. So what do you do? You get a quote today based on current guidelines. Do not worry about the costs, make sure you are saving money every month. $100 a month is $1,200 a year this a big savings and will add up over time. This is extremely important for those that have seen a decline in income or may be unemployed at this time.
FHA Streamline changes
Old Streamline New Streamline
No Appraisal Appraisal Advised
No Maximum LTV 97.75% Max LTV
Unverified Income Income Verified
Unverified Assets Assets verified
Low Credit scores Higher credit scores
Large Lender Pool Fewer Lenders
Quick Closing OK No quick closing
Paul Clement is the senior loan officer at LeaderOne Financial. If you or any of your friends have questions or comments about mortgage or credit e-mail Paul at paulclement@leader1.com.
