The streamline refinance loan from FHA has expanded their refinancing guidelines similar to the Home Affordable Refinance Program. The FHA streamline loan no longer has a loan to value requirement for existing FHA customers which is very similar to the HARP refinance. The FHA streamlines require no appraisal either, whereas the HARP lenders still require an appraisal. The FHA streamline mortgage does not require income documentation, yet that HARP loan continues to maintain income criteria like W2’s, pay-stubs and tax returns. Both the HARP and the FHA streamline loan offer great low interest rates. The FHA streamlines do require monthly mortgage insurance and the HARP mortgage does not.
According to the MBA, the two most popular refinance programs nationally in 2012 is the HARP 2.0 and the FHA streamline refinance program. FHA is promising reduced upfront costs on mortgage insurance premiums for distressed homeowners looking for relief from higher interest rates and an underwater mortgage.
Review the FHA Streamline Eligibility Requirements for Refinancing
- Must presently have a FHA home loan
- Current FHA loan must have been recorded by FHA before June 1, 2009.
- You also need to have no late mortgage payments in the last year.
- Borrower must be presently employed.
The FHA streamline lenders promise an automated process and the loan companies that offer the HARP 2.0 have been reporting a slow processing time because this new program is considerably backed up. According to a recent survey from the Federal Housing Administration indicated that average FHA customer would save $200 a month after refinancing into a FHA streamline loan.
FHA Streamline Loan Advantages
- Guaranteed lower monthly payments
- Guarantee that mortgage balance will not increase
- Lower FHA rates
- Skip 1 or 2 loan payments
- No appraisal needed
- Refinance without income documentation
If you are unsure about which mortgage relief program is best for your situation, talk to one of our lenders and they will help you uncover the best choice between the FHA streamline and HARP refinance.