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Today with historically low rates, the FHA streamline refinance loan has helped many homeowners in Rhode Island save money on their current mortgages.

Since the early 1980′s, the Federal Housing Authority (FHA) has been allowing homeowners to refinance their homes under the FHA streamline program. The term “Streamline” refers to the reduced amount of documentation that is necessary to perform this loan.

There are a few basics to the FHA streamline program:

1. The mortgage to be refinanced must be currently a FHA insured loan.

2. You must be current on your mortgage with no late payments in the last twelve months.

3. The FHA streamline refinance must result in the borrower reducing his/her current monthly principle and interest payments.

4. No additional cash may be taken out on a FHA streamline refinance loan. Maximum allowed amount is $500 cash back to borrower.

You can refinance your RI FHA mortgage loan without an appraisal and with a minimum 620 credit score. Although FHA does not have a minimum credit score requirement, many lenders have recently required the borrowers meet the 620 credit score minimum.

You will not have to submit any type of documentation evidencing your income such as W2s, tax returns or pay stubs. Instead, your current employer and income will be listed on the mortgage application. You lender is going to call your current employer to verify that you do work there. Simple as that.

Many lenders may offer FHA streamline refinances in several ways. Some lenders offer “no cost” refinances; actually, no out-of-pocket expenses to the borrower by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the lender pays any closing costs that are incurred on the transaction.

Lenders may also offer FHA streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, as determined by an appraisal. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed the original loan amount by 1.5%.
Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal.

Contact me today if your rate is over 6%.  I would be happy to help you take advantage of today’s low rates by putting you into a Rhode Island FHA streamline refinance.

Lynda Mckenzie
RI license#137627/NMLS#137627
Direct:  401-524-9796
E-mail: lmckenzie@guaranteedrate.com
Web:  http://www.guaranteedrate.com/lyndamckenzie
RI Licensed- 20102682LL