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Guide to FHA, 203K, and VA Streamline Loans from Approved Mortgage Lenders
Streamline loans are a great way to get the financing you need without the hassle of a fully documented home loan. The FHA streamline and VA streamline programs make it very easy to refinance from one FHA loan to another or one VA loan to another with very little new documentation. The FHA 203K Streamline line is a simplified version of the full 203K loan, making small changes to a home very simple and affordable.
FHA Streamline Refinance Mortgage
If you already have an FHA loan and wish to lower your rate because they have dropped since you originated your mortgage, the FHA Streamline program is the perfect choice. This program enables you to avoid going through the long, arduous mortgage process all over again while still obtaining a lower rate to save you money every month. The documentation requirements for this loan are very simple according to the FHA. You do not need to provide any new income documents nor a new appraisal – all of the original documents may be used for the new program. However, certain FHA lenders will require new qualifications depending on your situation, as a part of their lender overlay. Lenders that do not require new documentation make it possible to refinance even if you changed jobs, your property value dropped, or you have fewer months of reserves.
The largest concern regarding the FHA Streamline program is your housing history. Lenders will either pull your credit or look at your housing payments within their bank if you are using the same lender for the refinance. In order to qualify, the last 3 months of your housing history must be on time and there cannot be more than one late payment in the 9 months prior to the last 3 months. In short, one late payment is allowed in the last year, but it cannot be within the last 3 months.
The best time to apply for the FHA Streamline loan in order to obtain the lowest rates is when the economy is doing poorly because FHA rates directly coincide with the rate of inflation. The better off the economy is at the moment, the higher FHA rates become, but the worse the economy does, the lower FHA rates fall. This is because this loan program is meant to help stimulate the economy; during good times, these loans are not as high in demand, but in bad times, they are greatly needed.