FHA’s Streamline Refinance Is Simple For Those Who Qualify
The Obama Administration’s initiative to help homeowners with FHA mortgages — even those who are underwater — refinance their loans at a lower interest rate and reduced MI premium goes into effect June 11, 2012.
Under the Obama plan, if you qualify on the following criteria, you get don’t have to go through the paperwork maze and underwriting hassles that normally come with any refinancing. Here’s a quick overview of the FHA “Streamline Refi” program and what it takes to qualify:
• Bottom Line: Your current home loan must be FHA-insured and must have been put on FHA’s books no later than May 31, 2009. If you have a mortgage owned by FNMA, Freddie Mac, the VA or a private investor, you’re out.
• You need an unblemished record of paying your mortgage payment on-time for the last 12 months. If you were late occasionally a couple of years back, that’s OK. But the last 12 months need to be perfect.
• No new verifications of your income. If you’ve been paying on time for a year, it’s presumed you’ve got the income needed to repay the new obligation.
• No New Credit Evaluation. NO Concern about FICO scores.
• No New Physical Appraisal. The program generally accepts the appraised value of your home at the time you closed on your current FHA loan as good enough — even if you’re now in serious negative equity territory.
• Reduced Upfront MI : 0.01% of the loan size. Annual MIP : 0.55% of the loan size.On a $180,000 FHA loan at a 5.50% rate, homeowners could save about $150.00 per month at today’s rates.
And the Not So Good Stuff:
• Refinancing must provide a net savings of at least 5% in your monthly principal, interest and mortgage insurance payments
• The FHA prohibits increasing a Streamline Refinance’s loan balance to cover closing costs — origination charges, legal fees, taxes, insurance escrow, etc. Closing Costs must be paid by the borrower as cash at closing.
The Next Step:
ACT NOW! If you have an FHA mortgage that closed prior to May 31, 2009 … Call Me Today! Let’s review details of the program as it applies to your unique situation. The longer you wait, the more expensive it will be!
If you have an mortgage endorsed by FHA after June 1, 2009, do us both a favor. Tell your friends and co-workers about the FHA Streamline Refinance program. Have them call me at 860.945.9284 to discuss their options. You’ll feel like a hero and I’ll have the satisfaction of helping another homeowner who might be struggling to make ends meet. Remember, I can help in CT, NY, FL and all of New England.