If you have an FHA mortgage and could get a lower mortgage rate by refinancing to a new FHA mortgage, you should not hold back. FHA Streamline has minimal charges, almost no underwriting requirements, and you could be owed a refund of your upfront mortgage insurance premiums (Remember, the upfront MIP was reduced from 2.25% to 1%? So if you paid 2.25% you may have money coming. Here's how that works:

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The FHA does not re-check you r credit scores when you apply for an FHA Streamline Refinance. However, it does verify your payment history, so you want to pay that sucker on time if it's the ONLY bill you pay on time. You can have bad credit, with scores under 580 or even 500 and still get a Streamline Refis. However, your mortgage credit must be good or you'll not be eligible for the program.

Your income is not verified, and neither is your employment. FHA is already in the hook for your loan so employment status is immaterial.

If you want a Streamline Refinance you must have a perfect payment history for at least the last 12 months. That means no 30-day, 60-day, or 90-day late payments are allowed. In addition, your loan must be current when you apply for and close on your new mortgage.


Your mortgage balance cannot increase to cover your costs (except the upfront MIP, which is 1% of the loan balance). For anything else, you'll either have to bring in cash at closing or have your lender take the rate up a bit and pay the costs for you.

One cost that won't have to be paid, though, is the appraisal fee. That's because appraisals are not required.


If you refinance your FHA mortgage before 36 months have passed, part of that original Upfront MIP gets credited to your refinance. And there might be more. For example, if you financed a $200,000 FHA mortgage last year and added 2.25% upfront MIP eto your loan, your balance would have been $204,500 at the start. Assuming a 5.5% interest rate, ofter 11 months you would owe $201,987.

Refinancing at 11 months get you 60% of that upfront premium returned to you. 60% of $4,500 is $2,700. If you subtract $2,700 from your loan balance, you get a starting balance of $199,287. And your new MIP is only 1%, or $1,993.

So your ending balance on your old loan is $201,987, but your starting balance on the new loan is only $201,280, or $ 707 less. And that doesn't even include the savings realized by getting a lower mortgage rate.

So during this weird little transition, the sonner you refinance your FHA mortgage, the more you could save. Ask an FHA-approved lender and see.