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 homebuyers who were in a rush to close on their FHA and VA loans in a rush and did not have time to boost their credit scores and 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 an Impact on Mortgage Rates
Gustan Cho Associates are experts in helping people rebuild their credit and maximize their credit scores after bankruptcy. Our experts of mortgage professionals have helped borrowers go from zero credit tradelines to over seven to ten credit tradelines within six to twelve months.
The team at Gustan Cho Associates has helped clients increase their credit scores to over 700 FICO in six months to one year after bankruptcy and a housing event. Many of our clients work on a credit rebuild regimen after they close on their homes to prepare for a streamline refinance when their credit scores increase. Homeowners can qualify for an FHA and VA streamline refinance after six months of closing their home loans.
How VA and FHA Streamline Refinance Works Explained
Homeowners with a current VA and FHA loan can refinance their VA and FHA loan into a new VA and FHA mortgage at a lower rate with no costs from the borrowers and no new appraisal.
No income documentation and verification is 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 FHA loans for the past twelve months, they qualify for a streamlined mortgage.
Is a VA and FHA Streamline Refinance a Good Idea For Homeowners?
VA and 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 FHA loan.
Mortgage rates are at 20 years high, but many economists and mortgage experts forecast rates will be dropping. The refinance market is dead. However, homebuyers today are buying their homes with rates in the 6.0% to 7.5% range on government and conventional loans. Non-QM loans have rates higher than 10.0%. Once rates start to drop, refinancing can save you tens of thousands of dollars over a 30-year loan.
Net Tangible Benefit Requirements on Streamline Refinance
Homeowners with a current VA and 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 offering VA and FHA streamline refinance mortgages.
VA and FHA streamline refinance loan processes are similar, with minor exceptions due to Agency Guidelines. The VA and FHA streamline refinance processes are very simple. Most VA and FHA 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 must be on the new VA Streamline Refinance Mortgage. There is no appraisal required on IRRRLs.
There is no income documentation required. Credit scores are used to qualify for mortgage interest rates. Most VA Streamline Refinance Mortgages close in 21 days or less. IRRRLs 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 FHA Streamline Refinance
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 loan with a lower mortgage interest rate. Borrowers need a net tangible benefit to qualify for an FHA streamline refinance mortgage loan.
Streamlines are for rate and term refinance loans only. I 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. Why would late payments in the past 12 months matter on VA and FHA streamline refinance mortgage loans? HUD and the Veterans Affairs look at if you have been making timely housing payments for at least six months on your current loan, you will most likely make timely payments on your new FHA and VA streamline refinance mortgage loan.
As long as you have been making timely payments on your housing payments, you can be eligible for an FHA and VA loan. 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 Streamline Refinance Can Close In Less The Three Weeks With No Stress
Many borrowers say it’s too good to be true. Well, there is a reason behind this. The Department of Veterans Affairs and the HUD feel that they are already insuring the borrower with a VA and FHA loan.
They will continue as long as they have a history of paying their home loans. This is why the VA and FHA do not require home appraisal and 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 except for their mortgage loan. To qualify for a VA and FHA streamline refinance loan, you can have recent bad credit and late payments, except for their current mortgage loans. 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
The credit score-qualifying VA and FHA streamline refinance better pricing if you have high credit scores. Mortgage rates on VA and FHA streamline refinance mortgage loans on credit qualifying streamlines are based on the borrower’s credit scores.
Higher Credit Scores Means Lower Rates on FHA and VA 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 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 Refinance Lenders Offering Best Rates
FHA And VA Streamline Refinance are fast-track refinance mortgage programs only available on FHA and VA loans. 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 VA Streamline Refinance
Limited documents, no appraisal, and no income documentation are some of the benefits of streamline refinances. HUD and FHA believe that since the homeowner already has the home loan and has a 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. Gustan Cho Associates 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 VA loans. FHA and VA streamline refinance programs allow borrowers to refinance their VA and FHA loans with limited documents, no home appraisal, and no credit requirement.
FHA and VA Streamline Refinance Guidelines on Timely Housing Payments In The Past 12 Months
The only credit requirement is that the borrower has been 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.
FHA and VA Streamline Refinance loans do not require good credit. You can have had late payments in the past 12 months as long as you get approve/eligible per the automated underwriting system. However, credit scores play a major role in VA and FHA streamline refinance on credit scores. Timely payments in the past 12 months is always necessary to secure approve/eligible per automated underwriting system findings. The only credit requirement is to have been timely in the past 12 months. Credit scores are very important in determining mortgage rates.
Credit Scores Determine Mortgage Rates on FHA and VA Streamline Refinance
The borrower’s credit scores determine mortgage rates on streamlines. Although VA and FHA streamline refinance mortgage loans that are fast-tracked with limited paperwork, no income docs, and no appraisal, credit scores determine the pricing of mortgage rates. The higher the borrower’s credit scores, the lower their mortgage rates.
It is best to prepare to boost credit scores before a streamline refinance. Only rate and term refinance only. Cash-out on streamline refinances is not allowed. All original borrowers, including co-borrowers, must 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, government loan mortgage rates have substantially increased due to the illiquid secondary mortgage bond market. This includes FHA and VA loans.
The secondary mortgage bond market has no appetite for government and conventional loans on borrowers 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.
Many homeowners are willing and eager to do an FHA and VA streamline refinance 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.
Will House Prices Fall in 2023?
Once the mortgage bond markets stabilize, investors will get their appetite for government loans. The VA and FHA 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. Please be on standby for homeowners with higher mortgage rates on VA and FHA loans. Your opportunity should come. It is right around the corner. Gustan Cho Associates will keep our viewers updated on new developments.
Finding VA and FHA Streamline Refinance Lender With The Best Rates
For more information on Streamline Refinance Mortgages or any other mortgage-related topics, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at firstname.lastname@example.org. Streamline Refinance Mortgage Loans are becoming more and more popular.
The Team at Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays. Gustan Cho Associates are mortgage brokers licensed in 48 states with no overlays on government and conventional loans.
This blog on VA and FHA Streamline Refinance with Best Mortgage Rates was updated on December 11th, 2022.
December 11, 2022 - 9 min read