VA And FHA Streamline Refinance Mortgage Guidelines

Gustan Cho Associates are mortgage brokers licensed in 48 states

Both VA And FHA Streamline Refinance Mortgage Guidelines are almost the same. VA and FHA are the only two mortgage loan programs that offer the fast track streamline refinance loan program for homeowners with a current VA and FHA loan. Many home buyers who were in a rush to close on their FHA and/or VA loan in a rush and did not have time to boost their credit scores and/or rebuild their credit may have closed on their mortgage at a high rate. However, our loan officers at Gustan Cho Associates help borrowers reestablish their credit and build their credit scores.

Credit Scores Have Impact on Mortgage Rates

The team at GCA Mortgage has helped clients increase their credit scores to over 700 FICO in six months to one year after bankruptcy and/or a housing event. Many of our clients work on a credit rebuild regimen after they close on their home to prepare for a streamline refinance when their credit scores increase.  Homeowners can qualify for a streamline refinance on a VA and/or FHA loan after six months of closing their home loans. 

How VA And FHA Streamline Refinance Works Explained

Homeowners with a current VA and/or FHA loan are able to refinance their VA and/or FHA loan into a new VA and/or FHA mortgage at a lower rate with no costs from the borrowers and no new appraisal. There is no income documentation and/or verification required, no maximum debt to income ratio limits, no credit score requirement, and no appraisal. As long as the borrower has made timely payments on their current VA and/or FHA loans for the past twelve months, they are eligible to qualify for a streamline mortgage.

Is A VA and/or FHA Streamline Refinance A Good Idea For Homeowners?

VA and/or FHA Streamline Refinance is a great idea. With very little effort and absolutely no stress or your money out of pocket, a streamline lets you take advantage of low mortgage rates with a new VA and/or FHA loan. Mortgage rates are at 50 years lows and refinancing to today’s historic low rates can save you tens of thousands of dollars over the term of a 30-year loan.

Net Tangible Benefit Requirements on Streamline Refinance

Homeowners with a current VA and/or FHA loan may get substantial net tangible benefits by refinancing with a streamline refinance. Streamline Refinance is a fast-track refinance mortgage process that requires limited documentation. VA and FHA Loans are the only two mortgage programs that offer streamline refinance mortgages. VA And FHA Streamline Refinance Loan Process are similar with very minor exceptions due to Agency Guidelines. The streamline Refinance process is very simple. Most Streamline Refinance loans close in 21 days or less.

VA And FHA Streamline Refinance Mortgage Process

VA Streamline Refinance Mortgages is often referred to as the Interest Rate Reduction Refinancing Loan or IRRRL. Only homeowners with a current VA Home Loan can qualify for an IRRRL All borrowers on the original VA Loan needs to be on the new VA Streamline Refinance Mortgage. There is no appraisal required on IRRRL’s. There is no income documentation required. Credit scores are used to qualify mortgage interest rates. Most VA Streamline Refinance Mortgages close in 21 days or less. IRRRL’s are for rate and term VA Refinances only. Cannot do a VA Cash-Out Refinance with an IRRRL  All closing costs can be rolled into the VA Loan balance.

HUD Guidelines On Streamlines

FHA Streamline Refinance Mortgages are similar to VA Streamlines. Homeowners need to have an FHA loan to be able to streamline it to another FHA loan without an appraisal, no income verification, and limited docs. The old FHA Loan will be paid off with the new FHA loans with a lower mortgage interest rate. Borrowers need to have a net tangible benefit to qualify for an FHA Streamline Mortgage. Streamlines are for rate and term refinance loans only. Cannot get any cash-out on streamlines. All original borrowers including non-occupant co-borrowers need to be on the new FHA loan. There is no home appraisal required on streamline refinance mortgages. There are no documents required on streamlines. Credit scores are used for pricing mortgage rates. The higher the borrower’s credit scores, the lower their mortgage rates will be. Most FHA Streamlines at Gustan Cho Associates can close in 21 days or less.

VA And FHA Streamline Refinance Late Payment Guidelines

Streamline Refinance borrowers can have bad credit and qualify. Borrowers can have late payments in the past 12 months and still qualify for streamline refinances. However, you do need timely payments on your housing payments in the past 12 months. You can have late payments, collections, charged-off accounts, and other derogatory credit tradelines in the past 12 months and still qualify.

VA and FHA Streamlines Can Close In Less The Three Weeks With No Stress

Many borrowers say it’s too good to be true. Well, there is a reasoning behind this. Both The Department Of Veterans Affairs and the HUD feel that they already are insuring the borrower with a VA and/or FHA loan. As long as they have a history of paying their home loans, they will continue to do so. This is the reason why the VA and FHA do not require a home appraisal and/or credit requirements.

Importance Of Credit Scores In Qualifying For A Mortgage And For Best Rates

As mentioned in the previous paragraph, borrowers can have bad credit in the past 12 months with the exception of their current mortgage loans and qualify for VA and/or FHA Streamlines. There is no minimum credit score requirement on VA And FHA Streamline Refinance Mortgage Loans. There are two types of streamlines:

  • No credit score streamlines
  • Credit score qualifying streamlines

Higher Credit Scores Means Lower Rates On FHA and VA Streamlines

Borrowers with higher credit scores should go with the credit score qualifying streamline refinance.

Borrowers with higher credit scores should go with the credit score qualifying streamline refinance. The reason is credit score streamlines can offer substantially lower mortgage rates. The higher the borrower’s credit scores, the lower their interest rates. Borrowers who closed on the VA and/or FHA Loans with lower credit scores can explore doing a streamline refinance after six months when their scores have increased. There is no cost on streamlines and borrowers can skip two months’ mortgage payments after they close on their streamline.

FHA and VA Streamline Mortgage Lenders Offering Competitive Best Rates

FHA And VA Streamline Refinance are fast-track refinance mortgage programs only available on FHA and VA loans. Both HUD and the Department of Veterans Affairs created the FHA and VA Streamline Refinance programs. Streamlines were created to reward FHA and VA borrowers who have been timely on their mortgage payments in a fast-track streamlined process.

What Documents Do I Need For An FHA and/or VA Streamline Refinance

Limited documents, no appraisal, and no income documentation are some of the benefits of streamline refinances. Both HUD and FHA believe that since the homeowner already has the home loan with them and has proven timely payment history, why not have the borrowers refinance it at a lower rate in a fast-track process. The fast-track process does not require a home appraisal, no income documentation, and no credit checks. The only credit requirement is the borrower needs to have been timely on their home mortgage for the past 12 months. Credit scores are only used to determine mortgage rates. GCA Mortgage Group are experts on FHA and VA Streamline Refinance and can close most streamlines in two weeks or less. We will also discuss and cover FHA And VA Streamline Refinance During Coronavirus Pandemic.

FHA And VA Streamline Refinance Mortgage Guidelines

Streamlines are the easiest refinance loan program for homeowners. Homeowners can save tens of thousands of dollars with FHA and VA streamlines. Only FHA and VA allow borrowers to streamline their FHA and/or VA loans. Both streamline programs allow borrowers to refinance their VA and/or FHA loans with limited documents, no home appraisal, and no credit requirement.

FHA and VA Streamline Loan Requirements On Timely Housing Payments In The Past 12 Months

The only credit requirement is that the borrower is timely on their housing payment for the past 12 months. Borrowers can have late payments, collections, bankruptcy, foreclosure, charged-off accounts, and other derogatory credit in the past 12 months. However, the only credit requirement is to have been timely in the past 12 months. Credit scores are very important in determining mortgage rates.

The Importance Of High Credit Scores For Best Mortgage Rates On Streamlines

The higher the borrower’s credit scores, the lower their mortgage rates. It is best to prepare in boosting up credit scores prior to a streamline refinance. Only rate and term refinance only. Cash-out on streamline refinances are not allowed. All original borrowers including co-borrowers need to be in the new streamline mortgage. There is a minimum six-month waiting period after the closing of the original mortgage to qualify for streamlines.

Mortgage Rates During The Coronavirus Pandemic Crisis

Mortgage rates hit an all-time low due to the coronavirus pandemic crisis. The Central Bank (The Federal Reserve Board) has dropped interest rates to zero percent. Mortgage rates normally follow the Central Bank’s interest rates. However, mortgage rates have substantially increased on government loans due to the illiquid secondary mortgage bond market. This includes FHA and VA loans. What this means is the secondary mortgage bond market has no appetite for government and conventional loans on borrowers with under 680 credit scores. There are many lenders like J.P. Mortgage Chase where they suspended doing government loans until further notice. Chase Mortgage will only do conventional loans for borrowers with at least a 700 credit score and a 20% down payment. Due to the chaos and liquidity problems in the secondary mortgage bond market, it is not a good time to refinance via streamline mortgages until the market stabilizes.

Stabilization Of The Secondary Mortgage Bond Market

The secondary mortgage bond market is expected to stabilize. Right now, the mortgage markets are in chaos due to the coronavirus impact on the economy.

The secondary mortgage bond market is expected to stabilize. Right now, the mortgage markets are in chaos due to the coronavirus impact on the economy. Many homeowners are willing and eager to do a streamline refinance on their FHA and VA loans. It is not whether the secondary mortgage bond market will stabilize, but when. Nobody has a crystal ball. Many economists expect mortgage rates to stabilize in the coming weeks and months. Once the mortgage bond markets stabilize, investors will get their appetite for government loans. The streamline refinance market is expected to skyrocket in the coming months. When the liquidity issues are resolved in the secondary mortgage bond market, mortgage rates are expected to adjust to where they should be. Mortgage rates should hit in the low 3.0% range. Homeowners with higher mortgage rates on VA and FHA loans, please be on standby. Your opportunity should come. It is right around the corner. Gustan Cho Associates Mortgage Group will keep our viewers updated on new developments.

Finding The Best Streamline Refinance Mortgage Lender With The Best Rates

For more information on Streamline Refinance Mortgages, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] Streamline Refinance Mortgage Loans are becoming more and more popular. The Team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays. We are direct lenders with no overlays on government and conventional loans.