FHA Streamline Loan

by Ross from Utah, USA

Regarding FHA Streamline Loan and Owner Occupancy Question Kate, Firstly, I love your page, thanks so much. Secondly, I own an FHA mortgage with my mother and want to take advantage of the new low interest streamline ARM but she's going into an assisted living facility tomorrow. Do owner-occupancy rules doom getting the loan?


Kate Answers: FHA Streamline Loan and Owner Occupancy Question

Hi Ross, First of all let's talk about an FHA streamline loan. Don't think FHA streamline refinances have no fees or costs. I've seen a lot of folks disappointed over this on may occasions. That being said, this mortgage program has some unique features like...

1- No appraisal required
2- No income verification
3- No asset verification
4- Limited documentation

...as long as the homeowner is no more than 30 days late on payments in last 12 months.

But what about if the home has become non-owner occupied? FHA's website says. "Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal."

This sounds promising but remember if an FHA streamline loan is processed without an appraisal, the new loan amount cannot exceed the original loan amount.

If you suspect this tosses out your chances of taking advantage of a streamline FHA refinance, don't give up. Talk with your mortgage lender, explaining your mom's situation. I have found FHA sympathetic to our senior citizens over the years and it might be that they can figure out a way to still make the streamline refinance work for your mom and you.

In the meanwhile, I recommend looking over the links at the bottom of this page. They lead to other pages on my website with a wealth of information on low down mortgage programs and how to build equity. I hope you will let me know if you have more questions.

Take a moment to bookmark FHA Streamline Loan to your favorites and return often for more FHA tips.

Ross, this is your page. So you can invite friends to comment on it. They can also ask another question of their own like you did.

Visit FHA and VA FAQs for solutions based on inquiries from other Contributors just like you.

Best Wishes,

Ask Kate how to get the best mortgage rates
Ask Kate


P.S. Ross, I know you have a second question about FHA and owner occupancy but it deserves its own page! Watch for it soon! Kate

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FHA Streamline Refinance with 2 Mortgages
by:

Hello Kate, I had a question about my parent's FHA mortgage streamline possibilities.

They are looking into paying off second equity loan, fully or partially, and they want to make sure that they qualify for the refinance before they repay the second mortgage. Below are details:

First loan, FHA original Amount: $129,000
House bought: 2001
Current FHA loan balance: $104,000
Current Interest rate: 6.5

Second loan, equity, original amount: $75,000.00
Second loan, equity, current amount outstanding: $60,000.00
Current House value: $100,000

They are looking into following options:
1. Return the full remaining amount of the equity loan (second loan), and refinance with FHA streamline loan back to 30 years.
2. Return the full remaining amount of equity loan, and refinance with FHA streamline loan back to 20 years.
3. Return the partial amount of equity loan so that total outstanding currently is not more than original FHA loan amount of $128K, and refinance with FHA streamline loan. This is preferred option, if they qualify.

Thank you for your time. Maya

Hi Maya, Kate here.

It takes a loan professional equipped with complete details of your parents' finances to point out which of their proposed options best fits their circumstances. And because of the nuances in FHA streamline refinancing, your folks may need to talk with more than one bank.

Don't forget! Shopping for lenders is like interviewing prospective employees. Go to How to Compare Mortgage Rates and Lenders for help.

Best wishes, Kate

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You can also ask Kate about your mortgage at Refinancing Advice The Nuts and Bolts.

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