FHA has permitted streamline refinances on insured mortgages since the early 1980s. Streamline refinance refers only to the amount of documentation and underwriting that the lender must perform, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:
|• The mortgage to be refinanced must already be FHA insured.|
|• The mortgage to be refinanced should be current (not delinquent).|
|• The refinance results in a lowering of the borrower’s monthly principal and interest payments, or, under certain circumstances, the conversion of an adjustable rate mortgage (ARM) to a fixed-rate mortgage.|
|• No cash may be taken out on mortgages refinanced using the streamline refinance process.|
CityWorth Mortgage offers streamline refinances in two ways. We offer “no cost” refinances (no out-of-pocket expenses to the borrower) by charging a slightly higher rate on the new loan. For a lower rate option, you pay the closing costs at closing. FHA does not allow lenders to include closing costs in the new mortgage amount of a streamline refinance. Investment properties (properties which the borrower does not occupy as his or her principal residence) may only be refinanced without an appraisal.