The FHA STREAMLINE REFINANCE
Do you have an existing FHA home loan on a property in Minnesota, Wisconsin, or South Dakota? We are an approved FHA lender!
Then the awesome FHA streamline refinance can be used to refinance your current FHA loan to today's FHA interest rates, or to maybe refinance your adjustable rate mortgage to a new fixed rate loan with minimal paperwork, and usually without needing an appraisal. How cool is that?
In most cases, an FHA streamline refinance must result in a lower interest rate — that’s a fundamental rule (and benefit) of these types of streamline refinance loans.
So What is FHA
Refinancing of a current FHA insured loan into another FHA
insured loan is called an FHA Streamline Refinance. The mortgage
to be refinanced must be current (not delinquent). Not all FHA
to FHA refinances are streamline in nature. For example, if you
wish to take some additional cash out, that is a standard FHA
Is there a minimum waiting period before which you can do a Streamline Refinance?
Yes, even though FHA loans come with no pre-payment penalty, you need to wait for 211 days from your last FHA loan before which you are eligible for a new FHA streamline refinance.
Is there an appraisal required on FHA Streamline?
One of the biggest benefits of an FHA Streamline Refinance is that no appraisal is generally required. Your Loan-to-Value Ratio (LTV) is calculated based on the last appraised value when you got the current loan.
For cash-out FHA loans, an appraisal is required.
What is the Payment Benefit Requirement?
For you to qualify for an FHA Streamline loan, the new loan must meet a certain 5% payment benefit requirement, or you should be moving from an ARM (Adjustable Rate Mortgage) to a Fixed Rate Loan.
What if I don't meet the Payment Benefit Requirement?
If you can’t meet the 5% benefit requirement, you can still refinance from an FHA loan to another FHA loan. You may still be eligible for an UFMIP refund (see below), you would have to get the house appraised again. And the new Loan-to-Value ratio will be calculated based on the new appraised value, and that ratio can not exceed 97.75%.
How much refund do I get on the mortgage insurance from my original FHA loan?
When you refinance from one FHA loan to another FHA loan within 36 months, you are eligible for a partial UFMIP (Up front Mortgage Insurance) refund. The refund is a percentage of the actual UFMIP you paid on your current FHA mortgage. The percentage goes down every month and ultimately becomes zero after 36 months.
The table below provides all the details:
What is the up-front mortgage insurance rate on an FHA Streamline Refinance?
The current UFMIP is 1.75% for all loans, regardless of loan type, or loan-to-value. This is added to your loan amount, or can be paid out of pocket.
FHA Annual Mortgage Insurance Rate (monthly)
FHA loans all require monthly mortgage insurance, regardless of your loan-to-value, or loan type. This cost has varied over the years. Sometimes lower, sometimes higher.
The current FHA refinance loan mortgage insurance, as of January 27, 2017
0.55% annual mortgage insurance (monthly) plus 1.75% upfront mortgage insurance premium for a loan more than 15-years
.25% annual mortgage insurance (monthly plus 1.75% upfront mortgage insurance premium for a 15-year or less loan
NOTE: – If your current FHA Loan was endorsed before May 31, 2009 you may be eligible for reduced up-front mortgage insurance premium (UFMIP) of just 0.01% - and an annual mortgage insurance premium of 0.55% (monthly PMI). If you are not sure if your current loan was endorsed before that date, contact us and we can find that for you.
Here 30-yr fix FHA Loan the historical mortgage insurance costs:
- Prior to January 2008 : 0.50% annual MIP plus 1.50% upfront MIP
- October 2008 : 0.55% annual MIP plus 1.75% upfront MIP
- April 2010 : 0.55% annual MIP plus 2.25% upfront MIP
- October 2010 : 0.90% annual MIP plus 1.00% upfront MIP
- April 2011 : 1.15% annual MIP plus 1.00% upfront MIP
- April 2012 : 1.25% annual MIP plus 1.75% upfront MIP
- April 2013 to Jan 26th, 2017: 1.35% annual MIP plus 1.75% upfront MIP
FHA Streamline Refinance typically has the same rates as other FHA programs. You can check our FHA streamline refinance rates 24/7 here.
What are the closing costs on an FHA Streamline Refinance?
All mortgage loans have closing costs, including the FHA streamline refinance. Typical closing costs may include Lender origination fees (Points) and Escrow/Title related expenses and can add up to 3%-5% of your loan amount depending on the loan amount.
At Cambria Mortgage, we do offer a no point and no closing cost option. Start here with completing an application in 10 minutes or less.
You will also be required to set-up a new impound/escrow account for your Property Taxes and Home Insurance. Remember, that after closing on the new loan, your current lender will refund you whatever they had in their escrow account within 30-days of closing. It's like a nice little surprise check!
How Do I PAY FHA Streamline Refinance Closing Costs?
You can pay cash out-of-pocket, but few people, if any, ever do that. Most people elect to have it rolled into the new loan, giving them little to no out-of-pocket costs to refinance.
Start by completing a no obligation online application on our secure web site - Apply online NOW!
Call our office at (651) 552-3681