FHA Streamline Refinance
- No appraisal
- No income documentation may be required
- Relaxed FICO requirements
What is FHA Streamline Refinancing?
An FHA Streamline is a refinance option for homeowners with existing FHA mortgages. This program is “streamlined” because it doesn’t have many of the income and appraisal requirements that are included with standard refinance programs. As a result the streamline program provides homeowners with a quick, simple way to make their mortgage more affordable.
The FHA guidelines state that a streamline refinance must provide a benefit to the borrower by either lowering the interest rate, or converting the loan from an adjustable-rate mortgage (ARM) to a fixed-rate. The program also allows for higher loan-to-value ratios than many refinance programs, so borrowers who have little or no equity in their home are still eligible.
Get a report on the estimated value of your home that provides two estimated market values from leading providers.
Why an FHA Streamline Loan?
An FHA Streamline is a great way to take advantage of historically low interest rates and lower your monthly payment because the process is simpler than what is required by most refinance programs.* Unlike a conventional refinance, an FHA streamline refinance may not require you to submit income documentation or get an appraisal.
- No appraisal or income documentation may be required
- Options to lower payment without extending the length of your loan
- Low or no-cost options available
- Simple, easy and fast
Tip: Use our home loan calculator to estimate your monthly payment, including taxes and insurance estimates to get a clearer picture.*By refinancing your existing loan, your total finance charges may be higher over the life of the loan.
Requirements for FHA Streamline Refinancing
To take advantage of the FHA Streamline Refinancing program, you must meet a few key requirements:
- You must have an existing FHA-insured mortgage
- You must be current on your mortgage
- You are allowed no more than one late-payment in the past year, and are required to have made the six most-recent payments on-time.
- The refinance must produce a net tangible benefit resulting in:
- At least a 0.5 percentage point reduction in the combined interest rate and Mortgage Insurance Premium (MIP); or
- Refinancing from an Adjustable-Rate Mortgage (ARM) to a Fixed-Rate Mortgage (with no more than 2 percentage points greater than the combined interest rate and MIP)
- The new loan must not exceed the initial mortgage amount
- The refinance cannot be used to obtain cash in excess of $500
- You must pay on their original FHA mortgage for at least 210 days, before qualifying for the refinancing
Tip: Don’t have an FHA-insured mortgage? There are several other refinancing options available. Learn more about PennyMac Refinancing.
Why Choose PennyMac as Your FHA Streamline Lender?
As a leading mortgage lender that funded more than $2 billion in FHA Streamline Refinancing loans in 2016, PennyMac’s loan officers have earned a reputation for focusing on the unique needs of every homebuyer they work with. Whether customers are first time homebuyers interested in an FHA mortgage or are looking to refinance their existing FHA loan, our specialists are equipped to help borrowers through each and every step of the FHA mortgage process.
PennyMac is dedicated to making homeownership more affordable for everyone by enabling FHA borrowers to take advantage of historically low rates that will save them money on their mortgages every month. We’re working every day to improve the experience of refinancing and offer the best possible rates to our FHA customers. Want to learn more about how much PennyMac can save you with an FHA Streamline Refinance? Get your customized quote, today.
Frequently Asked FHA Streamline Questions
Will I Have to Pay Upfront Mortgage Insurance?
Yes. Similar to an FHA home loan, an FHA Streamline requires mortgage insurance: a one-time upfront mortgage insurance premium (UFMIP) fee paid at closing; and a monthly mortgage insurance payment. However FHA will refund a prorated amount of the UFMIP when refinancing with an FHA loan within three years.
Mortgage insurance costs vary depending on when a homeowner first obtained their FHA mortgage:
- Prior to June 1, 2009: Homeowners must pay an upfront premium of 0.01% of the loan amount and an annual premium of 0.55%.
- After June 1, 2009: Homeowners must pay an upfront premium of 1.75% of the loan amount, and the annual premium can range from 0.45% to 1.05%.
Note: Homeowners that have at least 10% equity based upon the last FHA appraisal will pay MIP for 11 years. Homeowners that have less than 10% equity are required to pay MIP for the life of the loan.
Can I Get Cash out with an FHA Streamline Refinance?
The FHA Streamline does not allow borrowers to take out cash with the loan. The loan amount includes the loan balance plus the upfront mortgage insurance premium (minus any refunds).
What Documents Do I Need to Apply?
While the FHA Streamline offers a simplified approval process, you will still need to provide certain documents to apply:
- Two months of bank statements to prove you can afford out-of-pocket costs (if necessary)
- A copy of your mortgage note to show your current loan rate and term
- A copy of your mortgage statement to verify payments are up to date
- Homeowner’s insurance information to ensure your home is covered