Florida FHA Interest Rates are back down near all time lows, and the lowest we have seen in over a year. Homeowners in Jacksonville, Miami, Tampa and Orlando – now may be the time to refinance your FHA mortgage if you missed the last opportunity when rates were this low. The FHA Streamline Refinance is a special mortgage product, reserved for Florida homeowners with existing FHA mortgages. FHA Streamline Refinances are the quickest way for FHA-insured homeowners to refinance their respective mortgages.
The FHA Streamline Refinance program’s defining characteristic is that it does not require a home appraisal – unlimited loan to value is allowed. Instead, the FHA will allow you to use your original purchase price as your home’s current value, regardless of what your home is actually worth today. In this way, with its FHA Streamline Refinance program, the FHA does not care if you are underwater on your mortgage. Rather, the program encourages underwater mortgages. Even if you owe double what your home is now worth, the FHA will refinance your home without added cost or penalty. The “appraisal waiver” has been a great advantage for FL homeowners, allowing unlimited loan-to-value (LTV) home loans via the FHA Streamline Refinance program. Homeowners in places like Miami, Tampa, Orlando and Jacksonville have especially benefited as these were the hardest hit Florida markets.
Questions? Just submit the info request form on the right side of this page anytime to learn more about FHA refinance pre-approval
Beyond this “no appraisal” feature, however, the FHA Streamline Refinance behaves very much like any other loan product. It’s available as a fixed rate or adjustable mortgage; it comes as a 15- or 30-year term; and there’s no FHA prepayment penalty to worry about. Another big plus is that FHA mortgage rates are the same in the FHA Streamline Refinance as with a standard FHA loans. There’s no penalty for being underwater, or for having very little equity.
Another benefit is that the FHA Streamline Refinance is fairly easy for which to qualify. A few year back, in an effort to help Florida homeowners, the FHA abolished most of the typical verifications required to get a mortgage. So, today, as it’s written in the FHA’s official mortgage guidelines :
- Employment verification is required with an FHA Streamline Refinance
- Income verification is not required with an FHA Streamline Refinance
- Credit score verification is not required with an FHA Streamline Refinance
There’s no need for a home appraisal, either, so when you put it all together, you can be (1) out-of-work, (2) without income, (3) carry a terrible credit rating and (4) have no home equity. Yet, you can still be approved for an FHA Streamline Refinance.
To understand why the FHA Streamline Refinance is a smart program for the FHA, we have to remember that the FHA’s chief role is to guarantee mortgages, not originate them. It’s in the FHA’s best interest to help as many people as possible qualify for today’s low mortgage rates. Lower mortgage rates means lower monthly payments which, in theory, leads to fewer loan defaults.
Although the FHA Streamline Refinance eschews the “traditional” mortgage verifications of income and credit score, as examples, the program does enforce minimum standards for applicants. The official FHA Streamline Refinance guidelines are below. Note that not all mortgage lenders will underwrite to the official guidelines of the Federal Housing Administration.
Solid 1 year Payment History Is Required
The FHA’s main goal is to reduce its overall loan pool risk. Therefore, it’s number one qualification standard is that homeowners using the Streamline Refinance program must have a perfect payment history stretching back 12 months. 30-day, 60-day, and 90-day lates are not allowed. One mortgage late payment is allowed in the last 12 months. Loans must be current at the time of closing.
210-Day “Waiting Period” Between Refinances
The FHA requires that borrowers make 6 mortgage payments on their current FHA-insured loan, and that 210 days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.
The Refinance Must Have Benefit
Streamline Refinance applicants must demonstrate that there’s a Net Tangible Benefit in the refinance; a legitimate reason for refinancing. Loosely, Net Tangible Benefit is defined as reducing the (principal + interest + mortgage insurance) component of the mortgage payment by 5 percent or more. Another allowable Net Tangible Benefit is to refinance from an adjusting ARM into a fixed rate loan. Taking “cash out” to pay bills is not an allowable Net Tangible Benefit.
Loan Balances Can’t Increase To Cover Closing Costs
The FHA prohibits increasing a Streamline Refinance’s loan balance to cover associated loan charges. The new loan balance is limited by the math formula of (Current Principal Balance + Upfront Mortgage Insurance Premium). All other costs — origination charges, title charges, escrow population — must be either (1) Paid by the borrower as cash at closing, or (2) Credited by the loan officer in full. The latter is called a “zero-cost FHA Streamline”.
FHA Mortgage Source is Florida’s leading FHA loan resource, serving you 7 days a week. Please call us at ph: 800-743-7556 or submit the quick Info Request Form on the right side of this page. Mobile users will find the Info Request Form here.
Homeowners that have other types of government home loans can learn about their refinance options by clicking below –
VA Home Loan – VA Refinance
USDA Home Loan – USDA Pilot Refinance
FHA Streamline Refinance Lender – Jacksonville, Miami, Orlando, Tampa FL. FHA Streamline Refinance, Rates Still Low