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The FHA Streamline Refinance program has been very popular in Orange County in 2009. Interest rates have been low relative to 2008 for most of the year, allowing people who bought their homes only 1 year ago or less to drop their interest rate any where from .5% to 1% or more with having to go through the approval process like they did when they first bought their home.

Why its Called the FHA “Streamline” Program

It’s not called the “Streamline” program for nothing. Anyone who has been through the loan process in the last few years can attest to the fact that the lender was extremely thorough when it came to documenting their income and down payment. But the FHA Streamline Refinance program does not require near the documentation and the process is very fast. It is “Streamlined”.

Here’s Why it’s Easy for Orange County FHA Borrowers to Take Advantage of the FHA Streamline Refinance Program

• No Appraisal is required. (That’s right. Can you believe it?)
• No income documentation is required. (Some lenders may verify that you have a job, but no paystubs or tax returns needed. Woo Hoo!)
• No Bank Statements or Asset Verification. (There are typically no costs associated with this program, so no need to verify.)

So What Does an Orange County FHA Borrower Need?

There are a few requirements in order to qualify, but they’re easy.

•  You must currently have an FHA loan. This program is not meant for those who have a Fannie Mae or Freddie Mac loan trying to go to an FHA.
• No cash out is allowed. This is not to say that certain things like your final mortgage payment or new impound account can’t be financed into the new loan.
• You must be current on your FHA loan, and with no more than 1 30 daymortgage late in the last 12 months.
• Most lenders do require a minimum FICO score of 620. Some lenders will allow lower scores, but the rate may be higher.
• There must be a benefit to the borrower. This is important. HUD does not want to see a lender taking advantage of an FHA borrower (or anyone for that matter). The borrower should be lowering their interest rate, payment, or term. Also, if the current loan is an adjustable, FHA sees it as a benefit if the borrower Streamlines into a fixed rate.

How Much Money can an Orange County FHA Borrower Save Each Month?

Depending on the loan size, the savings for even a .5% drop can be significant. For example, the difference in payment on a $300,000 loan for a .5% rate drop is $95 per month. A $400,000 loan would have a $127 payment drop. That’s $1,500 per year. Not a drop in the bucket. These savings were calculated using a straight interest rate and loan amount calculation. Every loan is different and the savings will vary depending on how long the borrower has been in the current loan and whether they also want to finance a mortgage payment and a new impound account into the loan.

What is the First Step in Finding out if a FHA Streamline Refinance Makes Sense for Me, an Orange County FHA Borrower?

The first step is to contact an Orange County Direct Endorsed FHA Lender. In order to make sure you are getting an accurate assessment from the loan officer he will need to know how much your current loan balance is, what your current interest rate is, what the original loan balance was on your current loan, the breakdown of your payment (including taxes and insurance) and the escrow account balance. Basically, the loan officer should be requesting your current mortgage statement, which will have most of that information. With this information, an FHA Streamline Expert will be able to give you a very accurate assessment of the benefits and/or savings you will (or will not) have. It is important to know that there is more than one way to get a Streamline done. If you are unsure of your loan officers knowledge with FHA, or you think there may be something better, don’t be afraid to check around. It can’t hurt.

Authored by Tim Storm, an Orange County, CA Loan Officer – Please contact my office at Trust One Mortgage for more information about an Orange County, CA home loan.  877-786-4243 x 7.

www.OCFHALoans.com

Contact us for your Orange County FHA Mortgage:

Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.

877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com

*Trust One Mortgage Corporation is licensed and supervised by the California Department of Real Estate (“DRE”), License # 01087829