Ohio FHA Streamline Pros and Cons

The FHA Streamline Refinance is a great option for homeowners who currently have an FHA mortgage. FHA originations picked up where subprime mortgage left off after 2007. Home buyers looking to put less money down and homeowners who had less than perfect credit probably got an FHA mortgage. Ohio, as well as the rest of the country saw FHA mortgage originations double from 2007 to 2008.

The FHA Streamline Refinance comes in a few different flavors, below are the Pros and Cons of the most common version, the Non Credit Qualifying Streamline (also known as the FHA Streamline Refinance without appraisal):

Ohio FHA Streamline PROS

• No APPRAISAL. Obviously the current housing market makes this the biggest PRO. 22% of Ohio homeowners are currently underwater. This provides those with an FHA mortgage the ability to take advantage of historically low interest rates.
• No income documentation. Don’t confuse this with the State Income (aka “Liar” loans) that were prevalent with subprime mortgages. Lenders will verify that you are working, but do not require documenting your monthly income. FHA already insures your mortgage, so the Streamline Refinance will put you in a better financial position, which makes it easier to pay your mortgage.
• Lower your interest rate. Simply put, lower interest rate = lower principal and interest payment.
• Adjustable rate to a Fixed Rate.  Refinance your ARM to a fixed rate.
• 15 Year terms. FHA loans with a 15 year term have even lower monthly Mortgage Insurance Premium (MIP) requirements.

Ohio FHA Streamline CONS

• Restrictions to lowering the term of your mortgage. FHA imposes a Net Tangible Benefit that you must meet to qualify for an FHA Streamline Refinance. Your monthly payment must be reduced by 5%. Lowering your term, you must also meet this qualification.
• FHA mortgage insurance starts over. Most FHA mortgages require monthly mortgage insurance (all of them except the 15 year fixed if you are under 78% financing). FHA requires that mortgage insurance to be paid for a minimum of 60 months, and that 60 months starts over any time you take out a new FHA mortgage.

Every situation is different, so I would encourage you to complete the FHA Streamline RATE QUOTE form so that we can discuss your options.