Many lenders allow a streamline refinance process to retain their customers. Also, Government insurers like the Federal Housing Administration (FHA) and Veterans Administration (VA) offer their own specific programs to enable you to take advantage of today's low interest rates with very little or no out of pocket cost. Please read on for specific information about how a Streamline Mortgage Refinance can save you money.

FHA Streamline Refinance

 If you currently have an FHA loan and you are considering refinancing to lower your monthly payment there is a simple low cost "FHA Streamline" refinance process which you should consider. If your refinance transaction is simply paying off the loan with a new one at a lower rate you will qualify for an "FHA Streamline Refinance without Appraisal". There is no requirement for either an appraisal to prove value or for any credit evaluation. While this approach will save you a lot in fees and from having to requalify from a credit perspective, you must reestablish your escrow accounts at settlement. You have to come to settlement with enough cash to establish the escrow account with a similar amount of money refunded by your current lender after settlement.

FHA has permitted streamline refinances on insured mortgages since the 1980's. The streamline refers to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. 

The basic requirements of a streamline refinance without appraisal are:

The mortgage to be refinanced must already be FHA insured.

The refinance is to result in a lowering of the borrower's monthly principal and interest payments.
No cash may be taken out on mortgages refinanced using the streamline refinance process.

No income, employment, or asset verification is required.
A mortgage payment history is required verifying no late payments within 12 months.
Another option is the "FHA Streamline Refinance with an Appraisal". This program is designed for people taking cash out or who want to add the escrow account to their loan balance (the escrow account refund from your current lender is yours to use as you see fit).

The basic requirements of a streamline refinance with appraisal are the same as without an appraisal but we are able to finance all of your closing costs.

There are certain situations when an FHA Streamline refinance does require credit qualification. In these situations, we will require verification of employment, assets, and credit profile.

If your new payment is larger unless going from an ARM to a fixed rate

If you remove a borrower from the current loan

If you assumed the current mortgage without credit qualification and the assumption was within 6 months.

FHA Streamline Refinances are one of the easiest and least expensive loans available.

VA Streamline Refinance
The Veterans Administration is available to active duty military and Veterans and Reservists. If you have a high interest rate VA loan, there is a low cost Interest Rate Reduction Loan (IRRL) program which will lower your mortgage payment inexpensively. If you are currently in a VA loan the qualification process is very easy and it will allow you to take cash out of the property to pay bills or for any other reason. The VA makes the process very easy and you do not need to pay anything out of pocket at settlement.

VA IRRL refinance loan which allows you to reduce your monthly cost easily. The IRRL benefit offers:

Faster processing
Option to roll closing costs into the new loan so you'll have nothing to pay up-front
No credit evaluation
Lower monthly payments
No appraisal requirements in most situations
Faster equity growth if the term is reduced
Option to include up to 2 months payments into loan allowing you to skip two payments
If the property is now rented, the veteran must certify they once lived in the property

Veterans with current VA loans can take advantage of lower rates and reduce monthly payments quickly and easily with radically reduced documentation requirements. The IRRL does not require any income, asset verification or credit report and it's available in fixed-rate mortgage options. This refinance program is part of your veterans benefit.

Conventional Streamline Mortgage Refinance
Most lenders offer a streamline refinance process. As you are aware, mortgages are bought and sold every day, and it is the current loan servicer who determines if a streamline mortgage refinance process is available. You are usually able to eliminate recording, state, and county tax payments (same lender old loan and new loan), You usually must requalify according to the lenders current guidelines and we must appraise the property to verify value, but this can be a money saving approach. Of course, if you have an issue with the current lender you may want to change anyway.