FHA Refinance

Georgia Dream Standard Down Payment Assistance Programs 

The standard down payment assistance benefits first time buyers that need help in their down payment and closing costs. To be eligible, a borrower must have a 30 year fixed rate mortgage, conventional loan, FHA loan, USDA or VA loan. 

If you don’t qualify for the Georgia Dream Program or other , you may qualify for other assistance programs like the American Dream Down-Payment Assistance Initiative or Federal Housing Administration (FHA) loan that requires at least 640 credit score. But, may require higher down payments. This is also good if you have a low credit score, but works the best for people who don’t have a great credit history. 

Veterans affairs (VA) loan have lower closing costs compared to FHA loans, but a borrower must have at least 640 credit scores. Since VA is government backed, you don’t need to get private mortgage insurance. Fannie Mae/Freddie Mac also offers a low down payment loan but with higher interest rates than other federal programs. There are also several tax credit schemes and education programs Georgia has to offer for home buyers. If you want to know how many of these programs and schemes you qualify for, give us your details and we will get back to you with a full list.

Why an FHA Mortgage Might Be Right for You

The FHA loan program has been more popular than ever the last few years as credit has become harder to get. FHA loans are one of the best options available for borrowers that would like to refinance their mortgage to get a better deal or to pay off debt. FHA loans are known as an easy loan to qualify due to the flexible credit guidelines and the low equity requirements. Getting FHA loans is popular for home buyers who have been through a financial credit event like a short sale, foreclosure or other financial hardship over the life of the loan in the past and are looking to get their finances back on track.

Types of FHA’s Refinance Loans/ FHA Refinance Options

FHA Streamline Refinance  

The FHA Streamline Refinance is a special program specifically designed for borrowers who have an existing loan on FHA to be able to refinance with reduced documentation. FHA Streamlines are the easiest way to lower your mortgage monthly payments without having to verify a lot of information. That’s why FHA Streamline is the most popular way to refinance an FHA today.

Mortgage Guide - 5 Simple Steps to Refinance Your Home

Why are Streamlines So Great? 

FHA Streamline Refinance loans are by far the easiest currently existing FHA loan refinance programs to qualify for due to the flexible credit qualifying guidelines offered and overall streamlined process. One of the best features of the FHA Streamline Refinance program is that it allows for an unlimited loan-to-value ratio. Or in other words no fixed rate of minimum equity is needed to qualify for the FHA Streamline.

The existing FHA Streamline Refinance rates offer below-market interest rate for your loan. FHA Streamline allows you to switch from your existing FHA loan having a higher interest rate to a lower interest rate and where you can lower your monthly payments. Your new FHA streamline loan has two types, it could be a fixed-rate or adjustable-rate mortgage with a 15-year or 30-year loan term with net tangible benefit. 

The net tangible benefit is 5% reduction from the mortgage amount. You can now save money without much hassle, because FHA Streamline Refinance uses most of your original FHA loan documents in order to expedite your refinance process.

What are the Advantages of a Streamline? 

Fast turnaround time

No home value appraisal required 

No income documentation or verification  

Refinance even if you have no debt to income calculation  

Streamlined paperwork process 

Primary, investment or second home OK

What are the Requirements to qualify for a New FHA Streamline Refinance Program? 

Borrower may be able to apply for an FHA Streamline loan if:

Previous FHA loan must be current

Minimum credit score 640 

Must be able to lower your payment 

No late payments over 30 days in the last 12 months of the life of the loan

Simply put, you can be currently unemployed, have a faulty credit report, no home equity and still eligible for a new FHA streamline loan with less paperwork.

The borrower has to have made at least six payments in the previous loan to be able to apply for an FHA Streamline. Refinance must be applied if there have been at least 210 days that have elapsed between the due date of your first payment from your previous loan and the first payment on your new applied loan.

What About Mortgage Insurance? 

When you received your original FHA loan you agreed to pay an upfront Mortgage Insurance Premium (MIP) that is a lump-sum payment which was financed into your home loans. In addition to this you agreed to pay monthly mortgage insurance that is part of your total monthly mortgage payment.

If your current FHA loan was endorsed before May 31st 2009 you will be able to keep your new mortgage monthly mortgage insurance of 0.55% and it will be 0.01% for the in front of your FHA Streamline Refinance. 

If your current FHA loan was endorsed after May 31st 2009 you will be required to get new monthly mortgage insurance of 1.30% and it will be 1.75% for the upfront of your FHA Streamline Refinance.

FHA Cashout Refinance  

The FHA Cash Out is one of many excellent loan options to refinance FHA mortgage that lets you leverage the equity you have in your home to be able to pay off debt, consolidate a mortgage or simply pull out cash. It’s one of the most effective ways to consolidate high interest credit cards debt rate debt one low fixed rate mortgage payment per month which may be tax deductible.

What are the Advantages of a Cashout? 

Mortgage amount cashout up to 80% LTV 

Payoff high interest rate debt

Can roll in all closing costs

Debt to income ratio up to 55% 

What are the Requirements? 

Primary residence only 

Minimum credit score 640

No late payments over one month in the last 12 months

What About Mortgage Insurance? 

When you cash out your FHA mortgage, monthly mortgage insurance and upfront mortgage insurance will be required just like on your original mortgage loan. 

Your monthly mortgage insurance will be 1.30% and 1.75% for the upfront mortgage insurance.

Frequently Asked FHA Refinance Questions:

What documents I will need for a cash out/ streamline refinances? 

Copy of driver’s license 

Copy of social security card

Copy of your mortgage statement 

Copy of your FHA mortgage note 

Contact information for insurance agent 

Can I keep my same mortgage insurance?

Yes you can, the FHA streamline program allows you to keep the same mortgage insurance as long as your FHA mortgage was endorsed before May 31st 2009.

Is it possible to skip two mortgage payments?

In some cases it may be possible to skip two mortgage payments as part of your refinance. It will depend on when in the month you close your home loan.

There is little to no equity in my home, can I still refinance?

Yes, you can. Your choices are limited if you are refinancing your home when you do not have equity, and FHA Streamline is one of those programs that gives you a chance to refinance. A FHA streamline refinance will allow you to refinance without an appraisal. FHA Streamline refinances higher loan-to-value ratios that makes borrowers with no equity in their home eligible.

Can I get help with my closing costs?

Yes. Many times you can get help with your closing costs, if the lender may allow you to get slightly higher interest rates where lenders may offer you a ‘lender credit’ to offset your closing costs.

Will my loan amount increase?

Typically on a FHA streamline loan, your home loan amount will only increase by the amount of the upfront mortgage insurance required based on the date when your original FHA mortgage was endorsed. But, loan balance may not be increased to cover loan charges. Loan charges include taxes and insurance must be paid in cash by the borrower or credited in full by the loan officer. 

The mortgage amount is limited to the principal balance plus the upfront mortgage insurance premium. 

What is a No-Cost FHA Streamline?

It is an FHA streamline where the borrower will not need to put out cash because loan charges will be credited by the loan officer in full.