FHA Streamline Refinancing

by Jay Dee from Colorado, USA

Ask Kate about FHA Streamline Refinancing: We had to move out of our property because of a work relocation. We want to use FHA streamline refinancing to lower our mortgage rate to 4.5 percent.

Jay Dee continues... The only problem is occupancy. Do you think we will be alright refinancing as long as we do not try to buy a new house? I have a renter lined up to move in already but we would be taking a small loss with our current 6.5 percent FHA home loan.

The broker we are working with is just telling us he did not hear the part that we moved out.

Kate Answers: FHA Streamline Refinancing

Dear Jay Dee, Let's get right down to the nitty gritty.

Want to know why your mortgage broker is telling you he doesn't hear that you moved out of your house? He understands the significance of owner occupancy declarations.

Read this definition of investment properties on the FHA website:

"Investment properties are properties in which the borrower does not reside in as his or her principal residence."

Now I'm not the ethics patrol but I'm letting you know you don't want to fudge on owner occupancy declarations with FHA mortgage loans. For that matter, any home loan. You live in the house or you don't.

Mortgage companies have been known to check occupancy status after a home loan closes. If you declare you are living in the house but you've moved out, it could spell financial disaster for you.

Basic FHA Streamline Refinancing Guidelines

FHA Streamline Refinance is not complicated. Here are the five main highlights:

• The mortgage to be refinanced must already be FHA insured.


• The mortgage to be refinanced should be current.


• The refinance should lower the monthly house payments.


• No cash to the borrower at closing.


• Investment properties may only be refinanced without an appraisal.

FHA Streamline Refinancing For Investors

Why fudge on owner occupancy status when FHA streamline refinances make provisions for rental properties! In fact, investment property owners are not required to purchase an FHA appraisal.

This isn't to say you'll get the identical interest rate or mortgage amount as an owner-occupied borrower. But you won't be placing your home loan in jeopardy either.

Choose A Mortgage Lender You Trust

So here's what I'd do! I'd talk to my mortgage broker about this. If he can't discuss that you've moved out of the house already, well... let me say this is a pretty good indication of what he knows about FHA loan requirements.

Here's more help understanding FHA. Solve the mysteries of government insured loans with additional articles from my FHA article series.

1. FHA Refinance - Myths or Facts
and
2. FHA Loan Requirements- Yes! No! Maybe! Wait! Of Course! Never!

Jay Dee, one more thing. I'd like to hear back from you. Let me know if this page was helpful to you. Comment here on FHA Streamline Refinancing.

Or Ask Kate another question here.

Best wishes,

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