FHA Streamline
FHA Streamline Refinance
The streamline refinance is a special refinance program only available to FHA borrowers. It was developed by the Department of Housing and Urban Development in the 1980s and is strictly regulated. It can only be performed by an FHA approved lender. The streamline refinance is designed to lower your mortgage payment when interest rates drop. The FHA also permits you to shorten the term of your mortgage so you can pay off your loan sooner. As a direct lender, Oceanside Mortgage can offer interest rates and fees that are typically much lower than our competition.
Reduce Mortgage Insurance
As an added benefit, borrowers who opt for the streamline refinance are entitled to reduce their mortgage insurance to the lowest level permitted by the FHA since 2010. Loans issued after January 2015 qualify for a mortgage reduction of 0.5%. The FHA has made it clear that refinancing is the only way to reduce mortgage insurance.
Who Qualifies For Streamline Refinance
The primary requirement to qualify for the FHA streamline refinance is an on-time mortgage history. The FHA requires that all payments in the past year were paid within 30 days of their due date. The borrower also must be employed, collecting disability or retired.
Why Oceanside
As a streamline refinance specialist, Oceanside Mortgage can offer several distinct advantages. First, we pay your third party closing costs. This means your loan amount will not increase unnecessarily. Oceanside does not require an appraisal for this program and we do not charge any application or lender fees.
Additionally, when you refinance with Oceanside, we will automatically add you to our streamline FastTrack program. With the FastTrack program, we will contact you each time rates drop so you can rest assured that you are always at the lowest possible rate.
Finally, since we focus on the streamline, we have greatly reduced the time and effort required to complete the process. We will not ask for documentation beyond the FHA requirements and will be able to close your loan in as few as two weeks. We have helped hundreds of borrowers take advantage of this program. We have been in business for over 20 years and have an A+ rating with the BBB. We also have hundreds of 5-star reviews on Facebook, Google, and Zillow.
FAQs
The Program
Who is Oceanside Mortgage Company?
Oceanside Mortgage Company is a direct lender, not a broker, that specializes in FHA government mortgages. Since 1996 we have built our reputation by offering low rates and fast, honest processing. All Oceanside Mortgage Loan Representatives must pass a rigorous background and credit check, state licensing tests, and be licensed by the department of banking in your state. We are proud of our A+ rating with the Better Business Bureau and our 5-star ratings on Google and Facebook.
Will I have to pay closing costs?
Oceanside Mortgage does not charge any lender fees and we pay the 3rd party closing costs for the streamline to refinance. The only amount added to your loan is a small fee to the FHA. This fee is called the FHA Upfront Mortgage Insurance Premium. This fee can be financed into your new loan so that you do not have to pay it out of pocket. If you have been in your loan for less than 3 years, you will be entitled to a credit to offset the FHA premium.
Can I skip a payment?
In the month between closing and your first payment, you do not have a principal and interest payment due. As part of the process, we will verify your escrow balance and determine the number of funds required to establish your new escrow account. You may need a partial escrow account payment to balance your account. Your loan officer will be able to review this in advance of closing with you.
Can I shorten my mortgage term?
The FHA permits you to shorten your mortgage term as long as your payment does not increase by more than $50. At Oceanside Mortgage, we offer custom loan terms from 15 to 30 years. A loan officer can determine the minimum loan term you qualify for.
Should I not refinance unless I can reduce my rate 1%?
No. Traditional logic says you need to save 1% or 2% to benefit from a refinance transaction. This may be true on a conventional loan where you are required to complete an appraisal, requalify for the new loan and pay closing costs. The cost and effort required to take advantage of this program greatly reduce the hurdle required to benefit from a refinance. The FHA has determined that there is a “Net Tangible Benefit” from refinancing anytime you can reduce your combined interest rate at least 0.5%. Your combined interest rate is the note rate plus your mortgage insurance rate. We believe that every time you can lower your combined rate 0.5%, you should take advantage of this program.
Can I do a NO Cost loan?
Yes of course! Oceanside Mortgage Company will pay your third party closing costs for the FHA Streamline Refinance. As always, we will not charge any lender or appraisal fees. We keep your loan amount as low as possible to maximize your loan benefit.
Are you part of the FHA?
We are not. We are an approved FHA lender who is authorized and approved by the Department Housing and Urban Development to originate FHA home loans. We do not represent the FHA. Our FHA lender ID number is 1009000034. The FHA does not originate loans or lend money to purchase homes. The FHA insures your loan to help mitigate the risk the lender assumes when originating your loan.
What is an FHA streamline?
An FHA streamline is a refinance option that allows the underwriters to reuse much of the information from the original loan. Only an existing FHA loan can be refinanced with the FHA streamline refinance option. Oceanside Mortgage Company offers the streamline refinance with No Closing Costs, No Appraisal Fee, and No Lender Fees. A streamline refinance is a great option for existing FHA borrowers looking to take advantage of lower interest rates.
Can I use a streamline to borrow money to pay bills?
The streamline refinance is designed to maintain the equity you have in your home and therefore you can’t receive any cash-out. In many instances, you will not need to make your next full mortgage payment. We recommend that you use the interim month to catch up on other bills or put a little extra money into your savings. Since you are not taking additional funds out, the FHA does not require that we verify your income or your property value, keeping the process simple.
Do I have to go back to a 30-year loan?
At Oceanside Mortgage, we can customize your mortgage to meet your specific needs. We offer custom terms and may be able to eliminate years of payments or keep you right on pace with your current payoff schedule while putting money back in your pocket each month. We can set your mortgage to the exact number of months of your choosing. Your loan officer will be able to review the various loan terms that you qualify for to help you make your decision.
Can I refinance my hybrid ARM loan if it’s in a fixed period?
Yes, an FHA hybrid ARM such as a 3/1 or 5/1 can be refinanced into a 30-year fixed loan whether in its initial fixed period or adjustable period. Different net tangible benefit rules apply in each instance.
How long do FHA streamline loans take?
A general rule of thumb for the length of time it takes to complete an FHA Streamline is 30 days. However, it is very possible to complete an FHA streamline in as few as 10 days. We suggest asking your loan officer this question as he/she will have a better understanding of the details of your individual situation and loan. Streamlines are much faster to process since an appraisal is not required, we do not need to verify income or assets and will not conduct a property inspection.
How do I know this program is legitimate?
We get this question a lot! Many borrowers believe this program is too good to be true. We want you to feel very secure and safe when doing business with us:
- We have been in business over 20 years and have focused on this FHA Streamline since our inception.
- Our FHA Lender ID number is 10090-00034. You can verify our credentials with the FHA by visiting this link.
- Please review our testimonials on our website.
- We are BBB accredited with an A+ rating.
- We have hundreds of 5-star ratings on Facebook, Google and Zillow.
Are you BBB accredited?
Yes, we are BBB accredited! We have met all of BBB’s standards of trust and are proud of our A+ rating. BBB accreditation indicates many things, but above all, it indicates proper practices of honesty, clarity, and privacy within the company and its relationships with customers.
Qualification
How do I qualify for a FHA streamline?
Qualifying for a FHA streamline is the easiest of all FHA loans to qualify for. Oceanside Mortgage follows the FHA handbook, written by the Department of Housing and Urban Development and we can qualify anyone for a FHA streamline as long as they have a FHA loan now and they have an acceptable mortgage payment history.
The FHA streamline does not require proof of income like W2s or tax returns. Most other types of loan require the lender must determine the borrower’s ability to afford the new monthly payments. The FHA streamline refinance eliminates this requirement. If you are employed, collecting disability or are retired, you should qualify for the streamline.
How many payments must I make to do a streamline?
You must make at least 6 payments before you can take advantage of the FHA Streamline Refinance. This rule is in place to prevent loan “churning”. Churning occurs when a lender refinances your loan very rapidly or multiple times with little or no benefit to you. If you contact a mortgage company that suggests you refinance after only a few months, we recommend carefully review the loan presented to determine if it is really in your best interest.
Is it considered late if I won't be able to pay until the 20th?
For purposes of FHA underwriting, no. FHA prohibits more than one late payment within the previous 12 months and any late payments in the last 6-months. However, FHA considers a late payment to be more than 30 days past the due date. If you make your payment on the 15th, 20th, or 25th of the month, the payment is not considered late enough to disqualify you from the program, unless of course your lender didn’t receive the payment until 30 days after the due date.
However, keep in mind that if you make your payment past the 15th, you are usually subject to late fees. To make sure you avoid extra costs, you should try to make your payment each month as close to the 1st as possible.
What is the FHA Streamline Minimum Credit Score?
FHA does not have a minimum credit score requirement since it does not require a credit report for FHA streamlines. At Oceanside, we understand that life happens and not every borrower will have a perfect credit score. We will review your scenario to determine if we can approve your loan no matter what credit score you currently have.
How do I know if I qualify?
You did the hard work when you purchased your home. For a Streamline Refinance, there is no appraisal or income verification required. To qualify you typically need a credit score above 580 and need to have been making your mortgage payments on time.
Do I have to live in my home to do an FHA streamline?
No. Many lenders may shy away from a non-owner-occupied FHA streamline but we will gladly assist you.
Can I Have Any Late Mortgage Payments?
Oceanside Mortgage will examine recent payment history on the existing FHA loan. The FHA requires that there must be no payments paid more than 30 days past the due date during the most recent 6-month period. Additionally, there can be no more than one payment made 30 days past the due date within the previous 12-month period. Oceanside typically requires that you have no 30-day late payments in the last 12 months. If you were just days or a couple weeks late on a payment, it most likely did not show up as a late payment on your credit report and you should be fine. You will not be reported late unless you paid your payment more than 30 days past the due date.
Will I Need an Appraisal? What If I Am Underwater?
FHA streamline loans do not require an appraisal. This saves the borrower $450-$550 or more. Oceanside Mortgage uses the original purchase price of the home as the current value. This guideline helps homeowners whose home has lost value. Even homes that are “underwater” – having negative equity – are eligible.
The Application
What documentation is required for the streamline?
- Photo Identification
- Social Security Card or W2
- Copy of Current Note
- Homeowners Insurance Declarations Page or Agent Contact Information
- Utility Bill
- Recent Mortgage Statement
Can I Remove a Co-Borrower with an FHA Streamline?
The streamline refinance was designed to keep all original borrowers on the loan. Removing a borrower requires documenting that the remaining borrower(s) qualify for the loan and income and credit verification may be required. Please contact your loan officer for details. At least one of the original borrowers must remain on the loan.
Will I be able to refinance again?
There is no prepayment penalty on an FHA loan. The streamline refinance is designed so that you can take advantage of improving market conditions as many times as it makes sense to do so. Once you are with Oceanside, we monitor the interest rates and if we can lower your payment again, we will reach out to let you know. You can take advantage of the FHA Streamline every 210 days.
How long does the process take?
From application to closing, the process takes just a few weeks. Once we are ready for closing your loan officer will contact you to schedule the closing appointment. Our closing agents can meet with you at your home or the location you prefer and can accommodate evening and weekend appointments. You will have the opportunity to review the final numbers prior to your closing appointment.
Can I Add Borrowers with an FHA Streamline?
Yes, borrowers may be added to the title and Mortgage on a non-credit qualifying FHA Streamline Refinance without a credit check.
Escrows
What about taxes and homeowner’s insurance?
The FHA requires that you escrow for property taxes and homeowner’s insurance. We will use the funds in your existing escrow account to establish the new account. As part of the process we verify the tax and insurance amounts and make sure your new escrow account is established with sufficient funds.
I have an escrow shortage. How does that factor in?
This is the perfect time to streamline! We can get your escrow shortage corrected in the month between closing and your first payment when a regular payment is not due. You can start the new mortgage without a shortage added onto your regular payment, keeping your payment as low as possible.
Will my taxes/insurance be included after the streamline?
Yes, FHA requires that you have an impound or escrow account for your taxes and insurance. This account will relieve you from the burden of having to write large checks to your tax authority and insurance company.
Closing
When is my rate locked?
To save you money, we do not typically formally lock in your interest rate. If we were to lock in your rate, we would need to charge you a lock in fee. We prefer to promise to make a good faith effort to deliver the terms offered. Since you are not required to pay any type of application fee, we ask you to review your final Closing Disclosure. At this point, you will be able to confirm that we have delivered the terms we promised.
Who do I make my payments to after the loan closes?
In many instances, you will pay your loan payments to Oceanside Mortgage Company after you close. In the rare occurrence where your loan is sold to another lender after you close, you will receive a First Payment Letter/Coupon which will guide and instruct you on where to mail or send your mortgage payments. If you ever have questions of confusion on where to send your payments, please contact us for assistance. If your loan is sold to another investor, the loan terms will remain the same.
What is the “Initial Closing Disclosure”?
The “Initial Closing Disclosure” is provided once your application is approved and your payoff received. This is still an estimate, as we may still be waiting for your property taxes and current escrow balance to be verified. Your loan officer will review the final closing disclosure with you prior to closing. By signing the initial closing disclosure, you are just acknowledging receipt and we can close your loan sooner.
Where do I go for my closing?
Our goal at Oceanside Mortgage is to make your loan process as effortless and easy as possible. We offer the option to close at your home or any location you desire at the time you prefer.
Mortgage Insurance
Why am I being charged upfront?
On every FHA loan, the borrower is charged both an upfront FHA mortgage insurance premium and a monthly mortgage insurance premium. This is an insurance policy which is paid directly to the FHA and protects the lender in the event of default. On a refinance, you may be entitled to a refund of the upfront premium.
How Do I Take Advantage of Recent FHA MIP Reductions?
FHA reduced its monthly mortgage insurance premiums (MIP) by 0.50% for all new FHA loans as of January 26, 2015. The reduction will save FHA borrowers hundreds or thousands of dollars per year. Current FHA borrowers must refinance with an FHA streamline refinance or another FHA refinances to lower their MIP.
What is the FHA Mortgage Insurance fee for?
FHA loans require a minimal down payment and have more relaxed credit standards. The FHA charges a reasonable upfront and monthly fee to insure the loan. Essentially the FHA is charging this funding fee to have funds available should they need to step in and assist the lender in cases where the borrower is in loan default. The FHA mortgage insurance is an insurance policy for the loan. Banks are willing to make FHA loans since they have the backing or guarantee of the US government.
When is the monthly mortgage insurance eliminated?
The amount of time you are required to carry mortgage insurance depends upon your specific loan to value. If you have at least 10% equity, your mortgage insurance will terminate after 11 years. If you have less than 10% equity, your mortgage insurance will remain on your loan until you pay the loan in full.
What is UFMIP and Do I have to Pay it in Cash?
UFMIP is the acronym for Upfront Mortgage Insurance Premium. It is the fee that FHA charges on just about every FHA loan to defray the costs of the program. As of April 2013, the fee is typically 1.75% of the full loan amount. So, if you open a $100,000 mortgage, your final FHA loan amount will be $101,750. For FHA streamlines, you can wrap this fee into the new loan and do not have to pay it out of pocket. If you wish, you have the option to pay it out of pocket, which reduces your loan amount. Most FHA borrowers finance it into the new loan. You also may be entitled to a refund of the UFMIP you paid on your current loan. This credit will be applied to reduce the amount of UFMIP paid on your new loan.
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Contact Us
Since our establishment, the team at Oceanside has worked on Streamline Refinancing. We offer a no closing cost option, minimizing the amount of money added to your loan. Oceanside has gotten rid of the middle man by being a direct lender, so all of the decisions about your refinancing are made in house. Call or email one of our loan specialists today. You’ll be in expert hands when you choose Oceanside Mortgage Company.
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Oceanside Mortgage Company is a private corporation. Oceanside Mortgage Company is not acting on behalf or at the direction of HUD/FHA/VA/USDA or the Federal Government. By refinancing your existing loan, your total finance charges may be higher over the life of the loan. NMLS# 80015 Visit the Nationwide Mortgage Licensing System & Registry consumer access website for licensing information: www.nmlsconsumeraccess.org Website authorization by the New York State Department of Financial Services is pending. Until this website is authorized, no mortgage loan applications for properties located in New York will be accepted through this site. Arizona Bankers License # BK-0940196
