FHA Streamline Refi Worksheet Explained

If refinancing has you thinking you’ll need piles of paperwork and hours of planning, think again.

The FHA Streamline refinance is a simple program for current FHA borrowers. It lets you take advantage of great interest rates and home lending programs. With little work, you can get out of a high-interest loan, shave down your current term, or convert from an adjustable-rate to a fixed-interest mortgage. The FHA streamline refi worksheet makes it easy to see if it’s right for you.

Overview of an FHA streamline refinance

The FHA streamline refinance allows you to refinance your current FHA loan into a new one. It can be your ticket to a lower interest rate or better repayment terms. The underwriting requirements are simple. A new appraisal isn’t required, making it easy to take advantage of this great program.

In other words, the FHA streamline refinance lets you refinance without as much hassle or legwork as when you bought the home. How do you know if you’re eligible or if the FHA streamline refinance is worth it? Use the FHA streamline refi worksheet.

The FHA streamline refi worksheet

Why a worksheet? Simple. Calculating your long-term savings with the FHA streamline refinance can help you decide if it’s the right choice. The FHA streamline refi worksheet helps you determine your maximum mortgage amount. When you know how much mortgage you can afford, the Good News Lending team gets to work. We'll find the best rate and loan terms that make refinancing worth it. There are two FHA streamline worksheets to use: an FHA streamline refi worksheet without appraisal and one with an appraisal.

FHA streamline refinance worksheet with appraisal

The best part about an FHA streamlined refinance is that an appraisal isn’t required. But, the thing is that if you pay for a new appraisal, lenders base your new loan amount on your home’s most recent value. This might leave more room to pay closing costs and upfront mortgage insurance if you want to roll those costs into your loan.

FHA streamline refinance worksheet without appraisal

Remember we said an appraisal isn’t required? It’s true. That’s where the FHA streamline refi worksheet without appraisal comes in. With it, lenders use your home’s original value from the assessment done for your existing FHA loan. This is a good option to simplify the refi process. It also lets you want to take advantage of lower interest rates.

Why you might consider FHA streamline refinancing

The FHA streamline refinance helps borrowers become more financially secure. But remember, it’s not a cash-out refinance. You can’t get any cash in hand with a streamline refi. Here’s when an FHA streamline refinance might make sense for you:

• If you had a low credit score when you bought your home and are in a better position now to qualify for better terms.
• If you took an adjustable-rate loan initially but want to convert to a fixed-rate loan.
• If you want to shorten your loan repayment term.
• If interest rates have dropped since you bought your home, and you want to take advantage of lower rates without extensive underwriting.

To qualify, you must:

• Already have an FHA-backed home loan.
• Not be delinquent on your current FHA loan.
• You have made at least six months’ payments on your existing loan.
• Have enough equity or cash on hand to pay closing costs.
• Prove you can reduce your term or lower your interest rate.

Lenders look back over the last 12 months of payments to review your payment history. You must have no record of late payments in the past six months to be in good standing. You must also have no more than one payment over 30 days late in the past 12 months.

The benefits of the FHA streamline refinance

Many benefits are available to borrowers who take advantage of an FHA streamline refinance:

• Lower refinance interest rates
• Mortgage insurance premium refund
• May not require an appraisal
• Reduced documentation requirements to qualify

So, what documents are needed for a FHA streamline refinance?

It can vary by lender and situation. Generally, you’ll need a current FHA loan mortgage note or statement, a copy of your driver's license or government-issued identification, a Social Security card, and a copy of your homeowners insurance policy.

Why do you need an FHA streamline refi worksheet?

The FHA streamline refi worksheet calculates the maximum loan amount for which you may qualify. It shows you what you can and cannot include in the loan. In short, the FHA streamline refinance may include:

• The outstanding principal balance on your current loan
• The new upfront mortgage insurance premium

Before you come to your total loan amount, you’ll subtract any eligible upfront mortgage insurance premium refund. 

Do I have to pay closing costs on a FHA streamline refinance?

The worksheet is also handy for determining your closing costs. If you don’t have the cash to cover them, you may roll them into your loan. But there’s a catch. You can only do that if you use the FHA streamline refi with appraisal. If your home’s value is enough to cover the closing costs, you can include them in the loan amount.

Is a FHA streamline refinance worth it?

If you’re looking to save money on your mortgage, the FHA streamline refi can be a great option. Keep in mind the FHA streamline refinance isn’t a cash-out refinance. Its main goal is to make your loan more affordable or attractive. You can refinance without verifying your credit, income, and possibly your home’s value. The FHA streamline refi worksheet can help you decide which route to go based on the savings available to you.