FHA streamline loans are the #1 most defaulted mortgage loans available. Offered by the Federal Housing Administration, these FHA loans are easy to obtain refinances. The main catch to this FHA refinance, the homeowner must save a certain amount on their monthly payments by refinancing with the loan. They must also be refinancing from an FHA loan.
Created to ease the real estate crash, homeowners who qualified for the FHA refinance took the opportunity. However, many borrowers defaulted on their FHA streamlines which is the leading reason to the upcoming changes in requirements. FHA streamline refinance requirements are about to change and they are not going to become easier to obtain.
Original FHA Streamline Refinance Requirements
- No appraisal.
- No income disclosure.
- 2 year job history with verification of employment (VOE).
- Mortgage note & statement.
- Homeowners insurance.
Originally when trying for the streamline program the requirements were not very difficult. As you can see you really did not need to show much other than a steady income. Your property did not need to be worth any certain amount and there was no income disclosure requirement.
Newly Added FHA Streamline Requirements
- 2 years worth tax returns.
- 2 years worth of W-2s.
- 30 days worth of paycheck stubs.
- 1 month bank statement.
This #1 most defaulted loan has driven investors to require more from borrowers. Large mortgage banks are scared to invest without any stated income. Now a homeowner must not only show employment, they must also disclose their income. Although not all investors are requiring income to be disclosed, the ones who are offering the new requirements also offer benefits. Lower mortgage rates are available from banks offer FHA streamline refinances with the newer requirements. This is because they feel more comfortable with the borrower and their loan.
If you are one of the many impacted by the real estate market drop, then you may have heard about this FHA refinance. Streamline is not a bailout but is a way for homeowners to lower their mortgage rate without having to appraise their home. Since many houses are not worth as much as the loans backing them, this is a great option to lower monthly payments and fix old loans.
As always, speaking with a mortgage banker will offer the most up to date information about the FHA streamline program. FHA Streamline refinance lenders can help homeowners with requirements and other options that may be available. The goal is to fix the mortgage crisis and bring the real estate market back to normal. If you do not have an FHA loan and your home is underwater with a high LTV, you may want to look into the HARP loan program.
