FHA loans make buying a home easier when you have a moderate income or less money for a down payment. They also make refinancing easier with streamline refinancing, which lets you get a lower rate or better terms with less paperwork.
If you are a Freedom Mortgage customer, you can refinance your FHA loan through our streamline process with no credit inquiry in most cases and no appraisal* when you refinance with us. You can keep your current term too. To find out if you qualify, visit our Get Started page or call us at 877-220-5533.
What is an FHA streamline refinance?
Streamline refinancing, if you are a Freedom Mortgage customer, lets you replace your current FHA mortgage with a new FHA mortgage that has a better rate or terms. It typically requires less paperwork than refinancing a conventional mortgage. It generally doesn’t require an appraisal and has fewer credit and income requirements too.
What are the guidelines for an FHA streamline refinance?
Guidelines from the U.S. Department of Housing and Urban Development (HUD) state streamline refinancing needs to result in a "net tangible benefit to the borrower." What this means is a refinance needs to make sense for you, and the costs must be justified by its benefits. HUD guidelines require you to be current on your mortgage payments and state you cannot take out more than $500 in cash from the refinance.
Are there closing costs with an FHA streamline refinance?
You may have to pay closing costs with an FHA streamline refinance. As HUD states, a streamline refinance "refers only to the amount of documentation and underwriting that the lender must perform, and does not mean that there are no costs involved in the transaction." These closing costs may include items such as escrows, per diem interest, and government recording fees.
Advantages of an FHA streamline refinance
- Less paperwork.
- Flexible credit standards.
- Home appraisals are typically not required.
- Faster approvals than conventional refinances.
You may save money over the life of the loan if you keep your monthly payment and the length of your term the same.
Disadvantages of an FHA streamline refinance
- You’ll pay an upfront mortgage insurance premium at closing.
- Your loan balance may increase if you finance this premium into the loan amount.
- You may pay more money over the life of the loan if you increase the length of your loan term.
Is an FHA streamline refinance right for you?
To find out whether you qualify for streamline refinancing and if it makes sense for you, reach out to our Freedom Mortgage Loan Advisors by visiting our Get Started page or calling us at 877-220-5533.
* A credit pull would be required if an existing obligor is being removed for reasons other than death or divorce.