For homeowners with an existing FHA mortgage
A lower FHA Streamline rate gives you two options: lower your required monthly payment and keep the savings, or continue making roughly the same payment and put the difference toward principal. We show you the numbers behind both so you can see which option makes the most sense for you.
A lower interest rate lowers the payment the loan requires. What you do with that difference is your choice — and both choices are worth something.
Lower your required payment and keep the difference as monthly cash flow.
Keep paying roughly what you pay today and send the difference to principal.
Illustrative and educational only. Not a loan offer, rate lock, or approval. Actual terms depend on lender pricing and your specific situation.
How it differs
The transaction generally doesn't depend on establishing your home's current market value through a traditional appraisal.
Certain FHA Streamlines can be completed without the traditional income and employment underwriting used in a normal refinance, subject to FHA and lender requirements.
If you qualify for a lower rate, that reduction is part of your new loan terms — not a temporary discount.
Fewer traditional refinance hurdles: no new appraisal, no income needed. As easy as it gets.
Transparency
FHA Streamlines have specific eligibility requirements — and it's important to understand them upfront.
Your current mortgage must already be FHA-insured, and you must be current on your mortgage payments, with no recent 30-day late payments or forbearance. The refinance must also meet FHA's Net Tangible Benefit requirements, meaning the new loan has to provide a qualifying financial benefit under FHA guidelines. Your credit score must be 580 or higher, and the property cannot have an outstanding second mortgage associated with Down Payment Assistance (DPA). If you meet these basic requirements, an FHA Streamline may be an option. Final eligibility is determined based on your individual loan and lender review.
A common question
It might sound unusual at first: your next regular mortgage payment won't be due the month after your FHA Streamline closes. You skip 1 month of mortgage payments.
Here's why. When your Streamline closes, your existing FHA mortgage is paid off. Your new mortgage begins with the first payment due on the 1st of the second month after closing. It's a short-term cash-flow benefit created by the timing of paying off your old mortgage and beginning the new one.
Your existing mortgage is paid off, and the applicable payment is accounted for as part of closing.
No regular mortgage payment is due. That can give you some additional breathing room in your monthly cash flow.
Your first regular payment on the new mortgage becomes due.
Often overlooked
When your current loan is paid off, your existing servicer generally returns your remaining escrow balance to you.
Your escrow account holds money your servicer has been collecting from you for property taxes and homeowners insurance. When your current FHA loan is paid off as part of the Streamline, your prior servicer reconciles that account and generally sends you the remaining balance — separately from your new loan. Your new loan will then establish its own new escrow account, funded at closing. The timing of your refund depends on your prior servicer's own process.
Five minutes. No pressure. See what a lower rate could do either way.
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