Fairfield County borrower refinances without appraisal

Mortgage banker: Terry Hastings.

Home value: $500,000 in Fairfield County

Loan amount: $450,000

Loan terms: FHA 3.875% 30-year fixed

Backstory: Hastings received a call from a borrower who had a Federal Housing Administration loan, but was interested in refinancing. He had heard good stories and horror stories about the refinance process, but most importantly, he was concerned that his house had not shown any appreciation in value and might be underwater. Did he have options?

Hastings asked the borrower more questions about his property and where he saw the value in today’s market. He had bought it years back and had a much higher interest rate so was in a “no-win” situation.

Hastings explained the FHA Streamline refinance program. An FHA loan is a loan that is insured by the Federal Housing Administration. These loans were created during the Great Depression as a way to give low- to moderateincome earners the ability to own a home.

Today, FHA loans are available in Fairfield County for up to $601,450 and the credit scores and allowable debt are more flexible that the traditional conventional loan.

The FHA Streamline was designed to help the FHA borrower refinance as long as it was beneficial. Unlike most refinance programs, there is no appraisal required. In addition, most streamline loans require little documentation allowing for closings in less than 30 days.

In some cases and with a slightly higher interest rate, there are no closing costs.

Hastings explained the requirements of the FHA Streamline program his bank offered. Your mortgage must have been paid on time in the past six months, you must currently have an FHA loan and there must be a “tangible benefit.” This means that you must save at least 5% per month on your monthly payment, which protects borrowers from lenders placing profit before the borrower’s best interests.

The borrower loved the idea and was saving more than 10% in his new payment. He completed his online application and closed on the new loan less than 30 days later.