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FHA Streamline Refinancing Loans and Credit Qualifying Requirements

Home loan refinancing is among of the most popular types of loans in a troubled economy. When the six o’clock news has regular gloomy updates, it’s not surprising that people turn to refinancing loans to lower their payments and improve the bottom line.

FHA Streamline Refinancing Loans can help do just that–this type of refinancing is appealing because in many cases no additional credit check is required by the FHA (though the lender may require one anyway). In some cases, the lender does not have the option to process the FHA refinancing loan with no credit check–certain situations can “trigger” the credit check requirement.

Those include any change in the mortgage term that results “in an increase in the mortgage payment of more than 20%” according to the FHA rules, as well as a situation where “deletion of a borrower or borrowers will trigger the due-on-sale clause” and where a mortgage has been assumed in certain cases.

But what does the lender need when a credit-qualifying FHA streamline loan application is submitted? What creditworthiness standards are required for Streamline Refinancing? FHA rules state, “For credit qualifying streamline refinances, the lender must…verify the borrower

Joe Wallace - Staff Writer

By Joe Wallace

November 14, 2011

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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