Should you take advantage of the FHA/VA streamline refinance programs? See below and schedule a con

The VA Rate Reduction program is the streamline refinance program available for veterans/active duty military who currently have a VA home loan.  The following need to be met to be eligible and to make sure there is a net tangible benefit for the refinance.  Look out for lenders trying to churn your mortgage.  This is costly and reduces the benefits associated with this transaction.

How old must the current mortgage be?  The borrower must have made 6 mortgage payments AND the 210 days must have passed from the closing date of the mortgage.  The dates are from the closing/funding date thru the new case number date generated by VA.

How much does  the rate need to be reduced?  The minimum reduction is not set by a percentage or an amount, however, the cost of the rate reduction program must be recouped with 36 months of the transaction.  An example would be a refinance saving the veteran $150 per month could not cost the borrower more than $5400 at closing.  The good news is closing costs are much lower.  See the next section for more info. Smartly believes a savings of 1% is the minimum you would want to reduce your rate for it to make sense to cover the costs to close.

What are the closing costs for a VA Rate Reduction?  One of the benefits of the VA streamline program is the reduction in closing costs.  An appraisal and full credit report are not required, which saves the cost of these items ($600 - $700) depending on location.  Also reduced are any lenders fees (underwriting fees are removed for these transactions thru Smartly - a $450 - $1100 savings) and title fees.  The final amount of the closing costs will be determined by which law firm or title company handles the transaction.  Smartly is pleased to generate and send a binding loan estimate to you in advance of application.  Just ask!

How long does it take to close a Rate Reduction refi?  Due to limited info needed, most streamline refi's take less than a month from application to closing.

What documentation is needed to apply?  We just need a copy of your current mortgage note from your last closing, your mortgage statement and bank statements to verify funds to close **if the amount needed to close exceeds your current mortgage payment.

Utilizing the VA Rate Reduction refinance will save you money monthly on your mortgage payment.  You will also skip your next payment after closing.  If you would like to learn more or get a loan estimate, please reach out.

FHA streamlines need to meet the following to be eligible and to make sure there is a net tangible benefit for the refinance.  Look out for lenders trying to churn your mortgage.  This is costly and reduces the benefits associated with this transaction.

How old must the current mortgage be?  The borrower must have made 6 mortgage payments AND the 210 days must have passed from the closing date of the mortgage.  The dates are from the closing/funding date thru the new case number date generated by FHA.

How much does  the rate need to be reduced?  The minimum rate reduction is determined by what type of mortgage is being refinanced and what the new product is.  See above.  The general rule of thumb for a fixed rate to a fixed rate FHA is a savings of 1/2% including any reduction in PMI.  With the annual PMI reduced from .85% to .55% in March of 2023, this requires less than 1/2% in interest rate reduction for this calculation.  However, Smartly believes a savings of 1% is the minimum you would want to reduce your rate for it to make sense to cover the costs to close.

What are the closing costs for an FHA Streamline refi?  One of the benefits of the FHA streamline program is the reduction in closing costs.  An appraisal and full credit report are not required, which saves the cost of these items ($600 - $700) depending on location.  Also reduced are any lenders fees (underwriting fees are removed for these transactions thru Smartly - a $450 - $1100 savings) and title fees.  The final amount of the closing costs will be determined by which law firm or title company handles the transaction.  Smartly is pleased to generate and send a binding loan estimate to you in advance of application.  Just ask!

How long does it take to close a streamline refi?  Due to limited info needed, most streamline refi's take less than a month from application to closing.

What documentation is needed to apply?  We just need a copy of your current mortgage note from your last closing, your mortgage statement and bank statements to verify funds to close **if the amount needed to close exceeds your current mortgage payment.

Utilizing the FHA streamline refinance will save you money monthly on your mortgage payment.  You will also skip your next payment after closing.  If you would like to learn more or get a loan estimate, please reach out.