Wow that was Easy! FHA Streamline Refinance designed specifically for the consumer.

 

 

 

 

 

 

 

 

 

 

Confused Homeowner

 

Dear Confused Homeowner,

 First of all you are not alone. The FHA Streamline is a terrific loan and it is rather simple. Contrary to the media reports on lending. The FHA Streamline is designed to be simple and low cost. Many times the cost to close is simply the amount of the mortgage payment you would have made. Instead of paying your mortgage to your servicer you make that payment to the Escrow Company at close. Wholesalers have reduced their fees on these transactions and the many escrow companies have compatible rate programs. As is the case with every loan program each wholesaler has their own overlays or qualifications if you will. It is common to see a 620 credit score minimum, some require employment and others do not, no income and no assets are many times the case. Consult your professional to speak directly about your situation.

How the loan is set up and how the loan amount is determined is based on how long you have had your current mortgage. Based on the time that you have had the loan you receive a refund on the last upfront mortgage insurance premium you financed or paid for. For example: If you have had the loan 6 months you will receive 70% of the amount you paid. If you financed $3500 in upfront mortgage insurance premium you will be refunded $2450 applied to the payoff or closing costs. You will then have a new upfront mortgage insurance premium of 1.5% of the new base loan amount. There are a few ways to calculate your new base loan amount based on how long you have been in the current mortgage as well.

Here is a grid of the Upfront Mortgage Insurance Refund:

 

Upfront Mortgage Insurance Premium Refund Percentages
	Month of Year
Year	1	2	3	4	5	6	7	8	9	10	11	12
1	80	78	76	74	72	70	68	66	64	62	60	58
2	56	54	52	50	48	46	44	42	40	38	36	34
3	32	30	28	26	24	22	20	18	16	14	12	10

 

 

The bottom line is if you have an FHA Insured Mortgage currently and your rate is 6% or higher than it would be to your benefit to give your Mortgage Professional a call.

Matt Freeman