New FHA Guidelines for Streamline Refinance in 2010
Under today’s 2009 FHA streamline refinance guidelines, homeowners with FHA mortgage loans are able to lower their monthly mortgage payment when FHA reduces the interest rate. Today’s guidelines allow homeowners to refinance without an appraisal or verifying income and assets with fast turnaround times. Even homeowners with low credit scores and no jobs are eligible. FHA figured since they were insuring the mortgages to begin with, helping homeowners lower their monthly mortgage payment which in turn should lower their risk of foreclosure.
What’s Changing with FHA Streamline Refinances in 2010?
In a letter from The Office of Housing and Urban Development dated September 18, 2009, the guidelines for 2010 FHA streamline refinances, effective January 1, 2010, are changing drastically. The biggest changes to the FHA streamline refinance are:
- FHA homeowners must be employed when they submit their FHA streamline refinance loan application
- FHA homeowners will be required to verify assets needed at closing
- FHA homeowners must have a full appraisal done in order to add “roll-in” closing costs to the refinance
- The maximum mortgage amount for a streamline refinances without an appraisal cannot exceed the outstanding principal balance and the new upfront mortgage insurance premium
- For streamline refinances with an appraisal, discount points (buying down the interest rate) can no longer be rolled into the new mortgage
2009 Streamline Refinance vs. 2010 Streamline Refinance
| 2009 Streamline | 2010 Streamline |
|---|---|
| No appraisal | Appraisal is recommended |
| No maximum loan-to-value | Max loan-to-value to 97.75% |
| No asset verification | Assets verified |
| No income verification | Income verified |
| Low credit scores ok | Higher credit scores required |
| Quick closings | No quick closings |
What Does this Mean to a San Mateo Homeowner with an FHA Loan?
If you currently have an FHA loan, you should explore whether or not it would be beneficial for you to do a streamline refinance in 2009 before the guidelines change. Start this as soon as possible to make sure you can take advantage of the 2009 FHA streamline refinance guidelines.
How Do I Determine Whether or Not I Would Benefit?
With some basic information about your FHA loan, we’ll be able to help you determine whether or not you’d benefit from a 2009 FHA Streamline Refinance. If you won’t benefit, we’ll tell you. Then, we’ll put your information into our loan analysis software and when we can help you, we’ll call you. No need for you to monitor the San Mateo mortgage market.
Need an FHA Streamline Refinance Before the Rules Change?
Are you a California homeowner with an FHA home loan? Give me a call at (650) 520-0915, send me an email at info@SanMateoMortgageBlog.com with your loan information and we’ll tell you if you can save money with a 2009 FHA Streamline Refinance. Alternatively, you can submit your information through our secure online mortgage application. We’ll analyze your loan situation and call you with some answers.
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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.
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