Orange, CA (PRWEB) October 28, 2014
In a single day rally and flight to quality in the United States bond market, Broadview Mortgage Corp. took a commitment to lend with impeccable timing. Mortgage rates slipped, and then sprung back up. “Last week the market interest rates dove and we were ready, willing, and able to take a good sized commitment to lend to Streamline FHA clients reducing their mortgages rates of 4% or above down considerably”, says John Krochman, Katella Branch Manager.
Broadview Mortgage has a long history of working the FHA Streamline market, dating back to 1988. An FHA Streamline refinance is much like it sounds--a quick and easy way to achieve a rate reduction absent of other features such as cash-out and term-reduction. FHA has allowed this limited documentation requirement mortgage since the early 1980’s. Most lenders such as Broadview do not charge fees for this type of refinance, as they are incentivized by the mortgage market to offer these services. The main qualifications are as follows:
- The mortgage to be refinanced must already be FHA insured.
- The borrower must have made at least 6 payments on the FHA insured mortgage being refinanced, and six full months have passed since the first payment due date of the mortgage.
- The mortgage to be refinanced should be current (not delinquent). One 30 day late in the preceding 12 months is acceptable, provided that payments in the last 3 months have been timely.
- The refinance results in lowering of the borrower's monthly principal and interest payments, or under certain circumstances the conversion of an adjustable rate mortgage (ARM) to a fixed-rate mortgage.
- No cash may be taken out on mortgages refinanced using the streamline refinance process.
Additionally, FHA does not require an appraisal on a Streamline refinance although one may be used in the transaction. Also, FHA rarely requires repairs to the property, with lead-based paint repairs being one of the few exceptions.
The most common use of the FHA Streamline Refinance is a reduction in rate. Term reductions are ineligible for the Streamline, so you cannot go from a 30-year term to a 15-year term mortgage. “The essence is, the new mortgage must save you money on the monthly payment each month and that amount is qualified at a 5% net tangible benefit”, explains Krochman. This means your new mortgage must have a payment that is 5% of the total monthly payment less than what you are paying now.
Other uses include Adjustable Rate Mortgage (ARM) to ARM refinancing, ARM to fixed-rate refinancing, and fixed-rate to ARM refinancing. Broadview offers both of these products.
Most of the FHA Streamlines Refi’s Broadview Mortgage offers are no-cost, whereas the borrower keeps making their monthly payments throughout the process and Broadview covers all of the fees. In some instances, the borrower will need to help contribute to establishing their new impound escrow account. Borrowers who have a challenge may be offered an advance of the funds for their impound escrows and repay them once they receive a refund from their current servicer. Each case is unique and interested parties should contact Broadview Mortgage direct at 714-464-2945.