FHA Streamline Refi NO DOC ?

FHA Streamline refinances are available to anyone who has a current FHA mortgage, though not everyone is eligible to partake in them.  First of all,  the interest rates currently offered must be signicantly low enough to save the customer at least 7.5% on their monthly payment.  Second, with the ever increasing Monthly Mortgage Insurance Premiums added to the loan, the monthly savings from the lower interest rates must more than make up for the higher insurance premiums, as well.
Third, borrowers must be current with their present mortgage payments for at least the past 12 months.  In addition, most lenders are requiring a minimum score of at least 660-680.  Some require as much as 720.  If you are one of the fortunate ones who fit all of these criteria, you may still not be eligible based on some other factors.

What if you have recently changed employment? I have had borrowers turned down by many lenders because they have become newly self employed?  They don't have a 2 year track record of earnings for their new business endeavor, thus they don't qualify to get any kind of a mortgage, let alone a streamline refinance through FHA.  What do these people do for a loan? In the past, we had mortgages for the self-employed borrower who couldn't produce the needed income necessary to qualify.  These loans were known as NO DOCS ( No documentation required ).  They came in many forms of loans.  They were called NIV ( No income verification), Stated, No Ratio, SISA ( Stated Income, Stated Assets) and NINA ( No income , No assets ).  All of them were a form of a NO DOC in some way or another.  Many economists felt that these types of loans were the main reason our economy took such a tumble.  These loans allowed un qualified people to buy homes that couldn't afford them.  Many are the foreclosures you see today.  In March of 2009, the governor of Pennsylvania Ed Rendell signed a bill outlawing these types of mortgages in any form.  All loans require some form of verification of assets and employment.   

I do have a lender that doesn't require any documentation regarding employment other than stating it on the mortgage application.  Even if someone is newly self-employed, they can qualify for the FHA streamline refinance as long as all of the above criteria are met.  The income section of the application is left blank.  All current and previous employers must be listed on the application going back two years.  A bank statement showing the money needed for closing is required from the borrower. 

In some cases, we as the lender can pay most of the closing costs for the borrower.  If you are one of the individuals who purchased your home in the height of the market prior to May 29, 2007, you are eligible to receive the discounted monthly mortgage insurance and no up front premium.  In addition, the streamline refinances don't require an appraisal of the property, so even if you have little or no equity in your current property, you will still be eligible for this loan. 

For more information please go to www.abacusmort.com and use the link "Full Application".

Andy Williams
President NMLS #118317
Abacus Regional Mortgage
484 695 5972