The borrower pays closing costs on an FHA Streamline Refinance. Unlike other types of refinances, you cannot roll these costs into your loan amount. FHA Streamline closing costs are typically the same as other mortgages: 2 to 5 percent of the mortgage amount, which would equal $3,000 to $7,500 on a $150,000 loan.
Simply so, are there downsides to streamline refinance?
The biggest drawbacks of a streamline refinance are having to pay the mortgage insurance premiums and closing costs. If you’ve got a newer FHA loan, you can expect your upfront and annual premiums to be higher, which means your payments could also go up.
In this regard, do you skip a payment with streamline refinance?
You won’t skip a monthly payment when you refinance, even though you might think you are. When you refinance, you typically don’t make a mortgage payment on the first of the month immediately after closing. … At closing, the original lender will retain payment for principal and interest charges through July 15.
How is maximum FHA streamline calculated?
Multiply the home’s value as reported on the appraisal by 97.75 percent of the home’s value, if that is the maximum loan calculation that applies to you. For example, 97.75 percent of a $200,000 home is $195,500. Add to this loan amount the new UFMIP amount based on a 1.75 percent rate, which is $3,421.25.
Is a streamline a good idea?
In short, the FHA Streamline is one of the most generous refinance options available. Because there are so few documents required, an FHA Streamline loan may close faster than a traditional refinance. And, you’re likely to save money on closing costs because you won’t have to pay for a new home appraisal.
What are the cons of FHA streamline?
FHA Streamline Refinance Drawbacks
- Only available to current FHA borrowers.
- Must pay UFMIP and other closing costs.
- UPMIP is the only closing cost you can finance.
- New mortgage can’t be larger than current mortgage.
- Cash back limited to $500.
- Won’t eliminate MIPs.