No income, no appraisal? No problem.
Streamline your FHA loan to a lower interest rate without the hassle of a normal refinance.
The Utah FHA streamline refinance is a special mortgage program designed to help refinance your existing FHA mortgage loan.
Whether you are underwater on your mortgage, or just looking to lower your interest rate and monthly payment, the FHA streamline process is easy and cost effective.
What makes this refinance program so awesome is that does not require an appraisal or any income qualification! Your credit score is also of very little importance, as long as you don’t have more than one late mortgage payment in the past 12 months and no late payments in the past 6 months.
The FHA streamline refinance must however have a purpose: one of these 2 net tangible benefits have to be met:
- Your new mortgage payment needs to experience a reduction of at least 5%
- Or: An adjustable ARM mortgage is being refinanced into a fixed rate.
Other restrictions apply:
- Any cashback received at closing may not exceed $500
- Cash-Out transactions are not allowed – the FHA streamline refinance is, in fact, a rate-and-term refinance
- The loan balance can only increase by the amount of the upfront mortgage insurance premium. Loan costs are not to be covered – don’t worry: your loan officer will cover them with a slightly higher interest rate unless instructed to do otherwise.
Recent FHA guideline changes have caused variations in the amount of FHA Mortgage Insurance collected. What makes a difference is a date when a particular FHA loan was endorsed.
If your FHA loan was endorsed before May 31st, 2009:
When you do an FHA streamline refinance, you will have a negligible Up Front Mortgage Insurance premium of 0.01% of your loan balance;
Your monthly mortgage insurance premium will stay the same at 0.55%, but it will be in effect for the life of the loan.
If your FHA loan was endorsed after May 31st, 2009:
You will incur an Up Front Mortgage Insurance Premium (MIP) of 1.75% of your loan balance;
Your Annual Mortgage Insurance Premium will be as follows:
- 15 year loans with loan-to-values over 90% : 0.70%
- 15 year loans with loan-to-values under 90% : 0.45%
- 30 year loans with loan-to-values over 95% : 0.85%
- 30 year loans with loan-to-values under 95% : 0.80%
*Jumbo FHA mortgages are subject to additional mortgage insurance fees. Loans with terms of 20 years or 30 years pay an additional 0.20%, while 15-year loan terms pay an additional 0.25% annually.
Your Up Front Mortgage Insurance Premium (MIP) refund:
If you financed/refinanced your FHA loan in the past 3 years, you will be entitled to a refund of your prior FHA up front premium. See this official HUD link .
How is your FHA up front mortgage insurance refund calculated? Your refund is reduced by 2 percentage points each month after your initial FHA loan closing date. See chart below:
Note that the MIP refund will be applied towards your new up front premium, not refunded as cash, and it only applies to FHA to FHA refinances.
Between the low current interest rates, the reduced monthly FHA mortgage insurance premium rate, and the Up Front FHA premium refund you may be entitled to – it’s a really good idea to look into streamlining your Utah FHA loan.
Other benefits of the FHA streamline refinance:
Skip up to 2 mortgage payments
Get a refund of your current escrow account, and do as you please with it. My suggestion: if you’re having trouble finding the cash to establish your emergency fund, use this money to get started.
Contact me today for a no obligation FHA Streamline refinance quote. No credit pull necessary.
For those of you stuck in an FHA Loan with a Second Mortgage, such as those offered through Utah Housing – read my blog post on How To Refinance Your Utah Housing FHA Loan.