FHA Streamline Refinance Illinois With No Closing Costs

This BLOG On FHA Streamline Refinance Illinois Was Updated On April 25, 2017

There are still tens of thousands of homeowners who did not take advantage of FHA Streamline Refinance Illinois Loan Programs. Many homeowners dread the thought of going through the mortgage process again with submitting tax returns, W2s, paycheck stubs, divorce decree, bank statements, and countless of other documents. However, With FHA Streamline Illinois loan programs, the process is very simple and most streamlines close in three weeks or less. The 2008 Real Estate and Mortgage Collapse plummeted real estate values not just in Chicago and the state of Illinois but the whole country where many homeowners still have homes that are underwater ( a term referred to where their mortgage loan balances are higher than the value of their home ). With the FHA Streamline Refinance, there is no appraisal required so the value of the property does not matter. Homeowners with underwater mortgages will qualify for Streamline Refinancing.  Our country had a national foreclosure crisis and home values throughout the country plummeted.  There is no county or city in this country that the real estate crash of 2008 did not affect.  To avoid a national foreclosure epidemic and also to reward those homeowners that did not bail and turn in their keys, the government created the FHA Streamline Refinance Home Loan Program which is still available today. In order to qualify for FHA Streamline Refinance Illinois Mortgage, the borrower needs to meet net tangible benefits per HUD FHA Streamline Net Tangible Benefits Guidelines . By net tangible benefits, the borrower needs to have an advantage and benefits in order for the loan officer to proceed with a streamline. A loan officer cannot originate the streamline refinance if it does not benefit the homeowner.

No Appraisal Requirement

One of the great benefits of doing a FHA Streamline Refinance Illinois mortgage is because there is no home appraisal requirement.

Here is the take with HUD why they do not require another FHA home appraisal:

  • HUD, the parent of FHA, requires no appraisals on FHA Streamline Refinance Mortgages because they feel that they are currently insuring a FHA Loan and the borrower has been timely on making their payment
  • Since the home is FHA insured, why order a second appraisal
  • If the homeowner has been timely with their current FHA mortgage for the past 12 months, why would they not be current with a new FHA mortgage that has a lower payment than the current mortgage payment

The above bullet points make all the sense in the world. Bottom line is why would HUD need a new appraisal on a property they are currently insuring and all of the borrowers and/or co-borrowers are still on the note and the loan balance is the same.

The FHA Streamline Refinance Program does not require the homeowner to get an appraisal since we are assuming the value of the house is lower than the mortgage amount.

FHA Streamline Refinance Illinois Guidelines

FHA Streamline loans are described in the official rules HUD FHA Handbook 4000.1 as follows:

  • To qualify for FHA Streamlines, borrowers need current FHA Loan
  • FHA Streamline Refinances are very simple with very little documentation required
  • Most FHA Streamline Refinances close in two to three weeks
  • FHA Streamlines has been created to help homeowners to lower the monthly principal and interest payments on a current FHA Loan
  • The is no cash-out with FHA Streamlines
  • New loan balance need to be same as loan balance being refinanced with the exception of minor pricing adjustments which is normally not to exceed a certain dollar amount
  • All original borrowers need to be on the new FHA Loan which includes co-borrowers with streamlines
  • Homeowners who need cash-out or need to take out a co-borrower need to do a regular FHA Refinance Mortgage which will require a new home appraisal

Credit And Income Requirements On FHA Streamline Refinance Illinois

As mentioned earlier, FHA Streamline Refinance Loans are the easiest loans any loan officer can do. There is no other loan program out there with a faster closing than streamline refinance mortgages. Most streamline refinances originated by The Gustan Cho Team at Nationwide Mortgage & Realty LLC are closed in two to three weeks. Besides no appraisal required, there is no credit scores required and no income verification with FHA Streamline Refinance Illinois mortgages.

Here are the FHA Streamline Refinance Illinois Mortgage Requirements:

  • No appraisal required
  • No closing costs
  • Most borrowers can skip two mortgage payments
  • No credit check. Borrower’s credit scores does not matter
  • Borrower can be late with any other monthly payments with the exception of their current FHA Loan
  • Borrowers can have recent late payments on credit card debt, installment loans, auto loans, and any other creditors with the exception of their current FHA Loan
  • One late payment on their FHA Loan is acceptable but not in the last six months
  • There is no income verification requirements. Paycheck stubs, tax returns, and W2s are not required.
  • Only document required is housing documents such as most recent mortgage statements and homeowners insurance policy

“Generally, the FHA streamline refinance mortgage amount may never exceed the statutory limits, except by the amount of any new upfront mortgage insurance premium (UFMIP).  However, the maximum mortgage may exceed the statutory limits on certain specialty products.”

Additionally, there are FHA loan rules that govern the term of the FHA Streamline refinance loan.  “The FHA streamline refinance mortgage term is the lesser of

  • 30 years, or
  • the remaining term of the mortgage plus 12 years.”

Most FHA borrowers often ask about if the FHA mortgage insurance factors into the maximum loan–this issue is touched on above but is further clarified in the rules as follows:

“The maximum insurable mortgage for FHA streamline refinance without an appraisal cannot exceed the outstanding principal balance minus the applicable refund of the UFMIP, plus the new UFMIP that will be charged on the refinance.”

The FHA adds that the outstanding principal balance, “may include interest charged by the servicing lender when the payoff is not received on the first day of the month, but may not include delinquent interest, late charges or escrow shortages.”

The FHA streamline refinance also makes provisions for subordinate liens–the rules include this guidance:

“A subordinate lien, including a Home Equity Line of Credit (HELOC), regardless of when taken, may remain outstanding, but the entire lien must be subordinated at refinance. ”

Easy To Qualify And Save Tens Of Thousands With FHA Streamline

Again, FHA Streamline Refinances are very simple and streamlined where little documentation is required. Illinois homeowners with FHA Loans can save tens of thousands of dollars by refinancing with a FHA Streamline Refinance Illinois Mortgage. There is no closing costs with us because due to our low mortgage rates, we are able to cover borrower’s closing costs with a lender credit. Contact The Gustan Cho Team at 800-900-8569 or text Gustan on his cell at 262-716-8151. Homeowners can email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

Comments are closed.