This Is the Average Credit Score Needed for an FHA Streamlined Loan

Individuals with mortgage loans might wish to refinance for several reasons such as taking advantage of lower interest rates or lowering monthly payments. If you currently have an FHA mortgage loan and wish to refinance, then an FHA streamlined loan is the simplest, quickest way to refinance your mortgage. The borrower requirements, verifications and approval process for an FHA streamlined loan are way simpler than with any other type of mortgage loan refinance.

Advantages of an FHA Streamline

  • No appraisal required
  • No loan to value requirements (underwater homes are eligible)
  • No income documentation required
  • Borrowers access low FHA streamline rates
  • You might receive a refund of your original upfront primary mortgage insurance payment
  • Shorter waiting periods and quicker closing times than conventional mortgage refinances

Who Can Qualify for an FHA Streamlined Loan?

An FHA streamline loan is the simplest way to refinance your existing FHA loan. Refinance approval, however, is not a certainty. There are some requirements borrowers must meet to qualify.

  • Borrowers must currently have an FHA loan and live in the home they want to refinance.
  • To qualify, borrowers cannot have refinanced with the streamline program in the previous six months.
  • Borrowers cannot request cash back on a refinance as a part of an FHA streamline loan.
  • Credit Score – Although there is no specified minimum credit score requirement, the standard benchmark minimum FICO credit score required for the program is 640. This is not a hard-and-fast number. So, if you are denied, shop around with other mortgage lenders, as some will approve a streamline loan for borrowers with a lower score.
  • Good Payment History – Borrowers can have no more than two 30-day (or more) late payments on the mortgage in the previous twelve months.
  • The refinance must improve the borrower’s loan terms with a lower interest rate, lower payment, or convert an adjustable-rate mortgage to a fixed-rate mortgage.

How Much Does an FHA Streamline Loan Cost?

Closing costs on an FHA streamline loan are usually similar to the closing costs of the original loan. If the borrower chooses not to have an appraisal done as a part of the loan closing, this will significantly reduce closing costs.

Most borrowers pay between $1,000 and $5,000 in closing costs on an FHA streamline loan, but yours could be less or more, depending on the principal balance of your loan.

In addition, you might have to a pay portion of up-front escrow (tax and insurance costs) to be deposited into your new loan’s escrow account at the time of closing.

Learn More about FHA Streamline Loans and FHA Streamline Rates

If you have an FHA home loan, we encourage you to contact a mortgage specialist at mortgage investors group. We can help you determine whether you might qualify for a lower or fixed interest rate, better monthly payment or a partial mortgage insurance refund. To learn more about FHA mortgages and FHA streamline loans, contact us today.