Hello, I'm looking for more info on FHA streamline refi. I discovered it when it was mentioned here recently. I currently have an FHA 30 year fixed mort at 7.00%, 7.5 APR. Id like to refi, but my credit is shot. I heard they don't pull credit reports, but there seems to be some conflicting info on that. I am current with my mortgage (WaMu) but have numerous late pays as recently as 7 months ago. 1. Should I see WaMu or a broker to do this? 2. Will they pull my credit? 3. What are the approval guidelines? 4. Does everyone get the same (going) fha rate or does it vary according to lender or credit rating? 5. Are rates low enough right now to justify refinancing for me? 6. Are closing costs involved in an FHA streamline 30 year fixed refinance? 7. Are fees involved like points, etc? 8. Does anyone have a site with good info on this topic? I tried to google it, but I keep coming up with mortage broker/sales sites. Thanks! Luke
Forgot one more question: 9. What happens to your current mortgage tradeline on your credit report when you refinance? Any luck that the one with all the late pays will fall off? Luke
They don't pull credit but the guidelines require no late pays in the last 12 months if the principal balance is increasing. See: http://www.fhalibrary.com/other_fha_issues/fha_refinances/default.asp We got ours 10 months after BK7 discharge. Also, cash out refis require full credit qualification. This can be found at: http://www.fhalibrary.com/how_to_qualify_fha/credit.asp
I know that I am refinancing my current mortage also...streamline refinance also...and credit is NOT pulled. I refinanced in 2000 and got an awful rate (8.875) and am now looking at 5%! Sure is nice! Plus I'm lowering my term too and my payments are still 130/month less then what I'm paying now. Can't beat that! But, when I refinanced in 2000 what happened with my credit report was the original mortgage was paid in full (showed paid zero balance) and the new one reported with the new principal finance amount. It will show 2 mortgages but one paid in full. At least that is what happened with our credit report.
It's a great program. One of the best benefits of FHA is that you can streamline. APR is a figure that's supposed to allow you to compare different loans at different rates and closing costs. Once your loan has closed, APR is irrelevant. You're rate is 7%. You need 12 months clean mortgage history. 1. It doesn't matter. Any FHA approved lender can streamline your loan. Sometimes your lender will try to convince you that it's easier to go with them because they already have your information, but that's not true. 2. There is a type of credit report that's mortgage only. Chances are they will use that report. A standard credit report is not required for FHA insurance on a streamline loan, but if you read through the manual, the underwriter does have the right to request one. How's that for a firm answer? 3. You need clean mortgage history for 12 months. Your new loan amount must be lower than your original loan amount (which is sometimes tricky if you finance escrow deposits and closing costs. If the new loan amount is higher, you need a new appraisal) and the streamline must demonstrate a substantial payment savings. That means $40 or $50. 4. FHA doesn't decide the rate. That's determined by the lender and the specifics of the loan. The rate will be higher if the loan is small, or if the lender needs to pay some or all of the costs of doing the loan. 5. Probably. It depends on how large your loan is and how long you've had it. 6&7. Yes. There are still title charges, escrow deposits, processing fees, etc. The streamline loan does require less work, so the fees are less, but there still are fees. Points are not common with this type of loan, but they still can be charged. Often this type of loan is done with "no cost". That means the lender charges a higher interest rate and pays the closing costs of the loan. 8. Not really. The people that put this information on the web do so looking to get business. Your best bet is to look at government sites, but be prepared to spend a lot of time looking before you find the information you want. Try the following: http://www.hud.gov/ I hope this helps.
