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More About The FHA Streamline
Who Are Streamline Refinances Best For?
FHA Streamline refinances are best for current FHA loan borrowers who want to lower their monthly mortgage payment.
How Do Streamline Mortgages Work?
FHA Streamlines lower your monthly mortgage payment by either reducing your interest rate or extending your repayment term. These loans are designed to “streamline” the refinance process, as many borrowers don’t need another appraisal and many lenders require fewer documents. In order to qualify, however, you must already have an FHA loan.
Borrowers have two main types of FHA Streamlines to choose from:
- Refinancing to a mortgage with a low fixed interest rate and choosing from a variety of terms (the length of the mortgage).
- Refinancing to an FHA adjustable-rate mortgage with a low fixed rate that ends after 5 years.
Because FHA Streamline loans are primarily designed to lower your interest rate, the amount of cash you can get out of your home from this type of refinance is limited to $500.
What Are The Qualifications For An FHA Streamline Refinance?
To qualify for an FHA Streamline loan, you’ll need:
- An existing FHA loan
- A minimum FICO® Score of at least 580 for loans currently serviced by Quicken Loans® or a minimum FICO® Score of at least 620 for loans not currently serviced by Quicken Loans.
- A debt-to-income (DTI) ratio that meets your lender’s requirements. DTI qualifications can vary based on local regulations. Speak with a mortgage expert to learn what you’ll need to get approved.
FHA Streamline Refinance Benefits
What Are The Advantages Of The FHA Streamline Refinance Program?
- Because you already have an FHA loan, you’ll need fewer documents to refinance.
- In many cases, you can refinance with the FHA Streamline Refinance program without needing a new appraisal on your home.
- The FHA Streamline Refinance program has more lenient credit requirements to refinance compared to most other loans.
- You can refinance even if you owe more than your home is worth.
The FHA’s Requirements For A Streamline Refinance
How Does An FHA Streamline Refinance Work?
- You need to already have an FHA loan to qualify for an FHA Streamline.
- If your current mortgage interest rate is higher than today’s rates, you can use an FHA Streamline to lower your interest rate, which usually lowers your monthly payment.
- Fewer documents are required and most people don’t need an appraisal, which is part of what streamlines the process.
- An FHA Streamline is primarily for lowering your interest rate, so the amount of cash you can get out of your home from refinancing is limited to $500.
What Are The Different Types Of FHA Streamline Mortgage Refinances?
- Borrowers have the option to refinance to an FHA mortgage loan with low fixed interest rate and choose from a variety of terms (the length of the mortgage).
- You can also refinance to an FHA adjustable-rate mortgage with a low fixed rate that ends after 5 years.
The Federal Housing Administration has their own set of guidelines borrowers need to meet before getting approved for a Streamline refinance, including:
- At least 6 months’ worth of payments made to your current FHA loan
- At least 210 days between the first payment on your new loan and the due date of the first payment on your existing loan
- At least 6 months since the first payment was due on your original loan