BIG FHA Streamline Refi news (for FHA loans prior to June 1, 2009).

Loan is approx 200k and I live in AK, not sure how closing costs compare here to other locales.

wow bta15, you stumped me there. I have no idea how Alaska closing costs compare to other States!

I have a feeling it is far less than States like NY, VA, and FL which have mortgage taxes which cause higher closing costs for these transactions.

-Adam
Old Hippy & Mortgage Pro

Just spoke is a US Bank loan rep about a streamline and according to him, there were no closing costs for a streamline refi with them. Not even rolled into the loan. He said that the closing statement would show somewhere around $2000 in costs and that there would also be a credit for the same amount.

I swear I am always afraid I am getting rooked into something bad. What are questions I should be asking? If it matters, the property is in Georgia.

Oh wow. I just had a lightbulb moment. I called USAA to see about a VA streamline after I got off the phone with US Bank. USAA offered me a 3.5% interest rate with about $2500 in closing costs versus FHA's 3.875% rate with no closing costs. Wow.

Quote from hawaiiandawn : Oh wow. I just had a lightbulb moment. I called USAA to see about a VA streamline after I got off the phone with US Bank. USAA offered me a 3.5% interest rate with about $2500 in closing costs versus FHA's 3.875% rate with no closing costs. Wow.

The current FHA Streamline rates are currently as low as 3.25%, however that rate has little to no credit to cover costs, while the 3.50% lender credit covers most (if not all) costs (depending on the State, as costs do vary by State) and then the 3.75% lender credit can even cover more if necessary (i.e. some want their escrows covered as well).,

Not to confuse things and to clarify, keep in mind that while these are both Government insured loans and while the process is relatively simple, the VA IRRRL is not the same as a FHA Streamline.
You need to currently have a VA loan for an IRRRL.
You need to currently have a FHA loan for a FHA Streamline.

-Adam
Old Hippy & Mortgage Pro

Quote from tiedyed1 : You need to currently have a VA loan for an IRRRL. You need to currently have a FHA loan for a FHA Streamline. -Adam Old Hippy & Mortgage Pro

I understand that. And I do. I guess I should have clarified but I thought that was a given. Sorry.

I guess the point I was making was that I didn't realize it was like the swap meet and I could bargain with them.

Current FHA Streamline rates are 3.50% with a very nice lender credit. (Also, as the rate credit is a percentage of the loan amount, higher loan amounts may even see 3.375% or 3.25% providing a lender credit to cover the closing costs.)

For those that want the lender credit to cover the costs plus a good amount of the new escrows (while you will also be getting your current escrows refunded post closing), then a 3.75% rate would work out well too.

Each scenario is very different where a few rate/pricing options should be evaluated so you can make the best choice as to what suits you best.

-Adam
Old Hippy & Mortgage Pro

I purchased my home with an FHA loan in 2008, but refinanced in 2010. Does that mean I wouldn't qualify for the benefits of this streamline?

Quote from sensasianl : I purchased my home with an FHA loan in 2008, but refinanced in 2010. Does that mean I wouldn't qualify for the benefits of this streamline?

As your current loan was endorsed by HUD after May 31, 2009 it would not qualify for the reduced MI premiums and would be subject to the full Up Front and Monthly MI premiums.

Keep in mind that while the benefits would be significantly reduced (compared to the reduced MI premiums), depending on your current rate and size of loan, there may still be a benefit that reduces your payment, making it worthwhile.

There is a minimum requirement of a 5% reduction in your monthly Principal, Interest and MI that the lender requires in order to prove the transaction as beneficial to the borrower. In many cases, with current rates so low, this can be achieved even with the higher MI premiums. Every case is different and needs to be analyzed.

-Adam
Old Hippy & Mortgage Pro

This is an interesting thread. I have looked into streamlined. But I don't have an FHA loan. And then I looked into HARP. It looks like my loan to value ratio is too low. (I think it is low - I get mixed up by what is high and what is low - but I think it has to be higher than 80% - meaning less than 20% equity from original loan). So I don't qualify as being underwater.

Dang! I was just looking for one of those quick and easy refinances to get lower interest without all the costs, appraisals, etc. etc. etc.

Quote from jteef1 : This is an interesting thread. I have looked into streamlined. But I don't have an FHA loan. And then I looked into HARP. It looks like my loan to value ratio is too low. (I think it is low - I get mixed up by what is high and what is low - but I think it has to be higher than 80% - meaning less than 20% equity from original loan). So I don't qualify as being underwater. Dang! I was just looking for one of those quick and easy refinances to get lower interest without all the costs, appraisals, etc. etc. etc.

Not meaning to get the FHA Streamline thread convoluted with HARP, but you do not need to be underwater for a HARP loan.

While FHA does not require an appraisal, in some cases the HARP loans can also receive an appraisal waiver as well.

HARP is for those loans owned by Fannie Mae or Freddie Mac prior to June 1, 2009.
In addition to the HARP product permitting high Loan To Values, it is also beneficial for higher than standrad debt to income ratios too.

Plus, with HARP, if your current loan does not have Mortgage Insurance and despite your new Loan To value being >80%, you still would not need MI with HARP.

If your existing mortgage was endorsed/purchased by HUD/FHA, FAnnie Mae or Freddie Mac prior to June 1, 2009 there is a very good chance there is a refinance product available you will benefit from.

-Adam
Old Hippy & Mortgage Pro

Quote from tiedyed1 : Not meaning to get the FHA Streamline thread convoluted with HARP, but you do not need to be underwater for a HARP loan. While FHA does not require an appraisal, in some cases the HARP loans can also receive an appraisal waiver as well. HARP is for those loans owned by Fannie Mae or Freddie Mac prior to June 1, 2009. In addition to the HARP product permitting high Loan To Values, it is also beneficial for higher than standrad debt to income ratios too. Plus, with HARP, if your current loan does not have Mortgage Insurance and despite your new Loan To value being >80%, you still would not need MI with HARP. If your existing mortgage was endorsed/purchased by HUD/FHA, FAnnie Mae or Freddie Mac prior to June 1, 2009 there is a very good chance there is a refinance product available you will benefit from. -Adam Old Hippy & Mortgage Pro

That is interesting to know. I thought you had to have less than 20% equity to qualify for HARP. But then, I don't know much about those things.

Are the HARP and FHA streamline rates comparable to rates you can get with a conventional refinance? Or they somewhat higher. It just seems like more of a risk to them. But then again - I guess the government is backing them - since they are refinances for people who have already been paying on their loans.

I know when the first Making Homes Affordable programs came out - they seemed to be a nightmare for people who were trying to apply. I hope these are a bit better.

When HARP initially came out there was so much confusion with banks failing everywhere and lenders were very slow to jump on board. HARP2.0 is better defined and has much more support, although there are still improvements needed.

Being well defined now, HARP2.0 is fully integrated into both Fannie Mae's and Freddie Mac's automated underwriting systems (Desktop Underwriter and Loan Prospector), making it much easier to obtain a clearly defined approval that lenders can follow. On many HARP loans an appraisal waiver is granted, also speeeding up the process. (The appraisal requirements are clearly defined in the automated underwriting findings.)

In some cases HARP pricing can be better than non-HARP conventional pricing as HARP loans have a cap on the total of pricing adjustments (limiting the add ons to pricing). In other cases conventional pricing may be better. When I have a loan that can go either way I simply price it both ways and take the direction of better pricing. For example, HARP is not only for primary residences, and investmentment rpoperties can have significant pricing adjustments. With HARP these adjustents are capped and can end up better than conventional pricing with all pricing adjustments.

FHA base rates are better than conventional, but unless FHA Streamline qualified with the lower MI premiums (for existing loans prior to June 2009) the standard FHA MI premiums are pretty painful.

For most new purchases I suggest a borrower to put at least 5% down to utilize conventional financing product options if they can. However, in addition to 3.50% down payments, FHA does have more lenient Underwriting standards when it comes to credit as well as debt to income ratios; so each very much have their importance and places in the market.

-Adam
Old Hippy & Mortgage Pro

Nice advice. Thanks.

I checked into Attorney Generals Settlement, I am with Wells Fargo, but turns out Freddie has my loan.

I closed my refi in July 2009, so I suppose I am out for the FHA Streamline too.

Any advice for me, short of a complete Refi.

THANKS