FHA Streamline Refi 2025 | Lower your RATE Easily

FHA Streamline in 2025. Hey, what's going on everybody? It's Jeff Javarthin, Jeff the Mortgage Pro. Thanks so much for watching. Today we're talking about FHA Streamline refinances in 2025 and this is a great loan. If you have an FHA loan currently and we want to try to drop the interest rate, then this is the loan for you. Okay, but before we get into it here, do me a huge favor. You can click on that like button down below if you like these videos and if you really like them, go ahead and subscribe and that way you'll see when my videos come out and you get a chance to watch all the different types of things that I talk about in the mortgage world. So thanks for doing that. I appreciate it. But let's get into it here first with FHA Streamline refinances in 2025. There's two different types. There's credit qualifying and non-credit qualifying. Non-credit qualifying is the most common, but if you wanted to do a credit qualifying refinance, it's also in other terms like a rate and term refinance where you can roll closing costs into the loan amount going forward. Sometimes you have to do this. You have to definitely pull credit on this one. You're going to probably have to do an appraisal for the credit qualifying, but the most common one that people are looking at into when they do an FHA Streamline refinance is the non-credit qualifying. So let's look at the eligibility requirements of these FHA Streamline refis in 2025. So number one, you already have an FHA backed home loan. So you did a mortgage, whether you purchased your property or you refinanced your property into an FHA loan, you already have an FHA loan on your current property. You have to have that to be eligible for an FHA Streamline refinance. Number two, you plan to use the FHA Streamline refinance that the FHA home loan is backing, and it cannot be used for mortgages on different homes. So if you have another property and you want to do an FHA Streamline on it, you cannot do it because number one, it's not your primary residence and you can only have one FHA loan at a time anyway. The second thing, or the third eligibility requirement, you can prove that you live in the home covered by the loan. So maybe an electricity bill or something along those lines is what you're going to maybe need to do that. Homes that are purely investment are not eligible for FHA Streamline. So let's say you bought a property with an FHA Streamline loan and then you moved, but you kept that property with the FHA loan on there. Since you don't live in the property anymore, you can't do an FHA Streamline on it. You'd have to refinance it into a conventional or a DSCR loan because it's an investment property now. It's not a primary residence for you. So you definitely have to be able to prove that you live in the home. The FHA loan must be current. So you can't have any late payments or forbearance. I believe it's in the last 12 months. So make sure that you are current on your mortgage going forward. Your existing loan that you have is at least 210 days old. So the purpose of this is that lenders don't want you churning refinances over and over for lower rates. So you have to wait 210 days from the closing of your original loan that you have. That's about seven monthly payments, most likely, or six monthly payments, because usually you skip a month when you get a mortgage. So 210 days old is another guideline here. Refinance has to be a net tangible benefit to the borrower. So the net tangible benefit varies based on the type of the loan that's being refinanced and the interest rate and our term of the loan. For example, you're converting it from an arm to a fixed rate loan, or you're converting it from a shorter fixed rate loan, like a 15-year fixed to a 30-year fixed. Those are definitely benefits to the borrower. And those things can be included in a net tangible benefit for you. Most often the case is going from a 30-year fixed to a 30-year fixed, but the interest rate drops by at least a half a percent in creating a net tangible benefit for you as the borrower. And lastly, another eligibility requirement, the cash in excess of $500 cannot be taken out on mortgages that are refinancing. So this is one of the things that you need to definitely take into consideration when we're doing this. Our lenders and underwriters will definitely do all these calculations for you for prorating mortgage insurance and things of that nature. But we can't have any more than $500 as cash out proceeds from you when we close this loan. More often than not, what you're going to have to do is bring money to the closing table when you have an FHA Streamline refinance. Okay. Let's look at some of the benefits of this. So very limited paperwork on an FHA Streamline, really a loan application, a mortgage statement, the note that you have on your property or on your existing mortgage. You don't even really need to verify employment or anything of that nature when we're doing an FHA Streamline refinance, right? Which is the cool thing that you don't have to worry about. So no limited paperwork or very limited paperwork here. Another benefit, no income documentation. So no income, employment or credit card, credit verification required, significantly less paperwork. You have a much lower interest rate compared to a conventional loan. Typically, FHA and VA and USDA loans tend to typically have lower interest rates than conventional loans do. But the reason being is that they all have, well, they have a mortgage insurance or a funding fee built into them typically for each of those different types of loans. So it could be a lower payment and you would always want to run the numbers to make sure that the FHA Streamline is going to be the best loan option for you, whether it's that or a conventional loan or any other type of loan going forward. Okay. You have lower PMI now. This was changed back in February of 2023, and it's a lower monthly PMI now on FHA loans. So if you did a loan prior to February of 2023, you're most likely paying higher mortgage insurance right now than what you should be paying. So if you were to refinance into a lower interest rate, that half percent drop in rate, you're also going to see a little bit of a drop in your PMI if it's during that time period. There's no appraisal required on a FHA Streamline refinance, which is a huge benefit. You're able to finance with little or no equity in these things. So typically we need about 10% equity is a very minimum to be able to do an FHA Streamline. But there's lenders that will go up to a hundred percent of the actual value of the property in that FHA Streamline. Okay. So they still work regardless of how much equity you have in there. Typically they're lower closing costs. And typically we try to keep the closing costs down. And often what we do is try to price these with a lender credit because FHA Streamline, the one thing that I don't like about them is that you have to bring in money for the closing costs on the transaction. So what we try to do is time it so we close towards the end of the month. So you have very little prepaid interest to pay on that loan. And then instead of making your current mortgage payment, we try to get it so that the amount of money that we have to close is about the same as your current mortgage payment. And we'll do that with lender credits. And that way, if we close on the FHA Streamline towards the end of the month, you don't make a new payment on your current mortgage. You're basically taking the closing costs from your existing mortgage payment to the new FHA Mortgage. And you're hopefully going to be able to skip a month after that. So that's kind of a benefit of doing an FHA Streamline and trying to get it timed out exactly right. And then lastly, a lower credit score will not disqualify you from this type of loan. Okay. So in summary, if you have an FHA loan and you have a higher interest rate and you see the interest rates are going down on 2025, reach out to me. I'm going to put my calendar link down below. Click on that link and let's go ahead and chat. And let's see if we can save you some money on your FHA Streamline refinance. And hopefully you have a lower mortgage payment going forward. Have a great day and I will talk to you soon. Bye.