A fast and easy refinance for those with an FHA mortgage | CharlotteObserver.com

A fast and easy refinance for those with an FHA mortgage | CharlotteObserver.com.

Verification and documentation requirements are also very light compared to the traditional mortgage requirements. With an FHA refinance, there is no employment verification and no income verification. While the FHA approves these lighter requirements, some individual lenders may decide to verify these items for their own purposes.

FHA Streamline Refinance also does not require a credit score verification. Instead, payment history is used as a guideline for your ability to pay the loan in the future. So, low FICO scores are not a problem as long as your payment history is in good shape.

The FHA Streamline Refinance program does require several things to get your loan approved:

• First, you’ll need a history of making payments on time over the past year, and at least six months must have passed since the closing date on your original FHA mortgage.

• Second, while there are no requirements for employment verification or income verification, you do need to provide copies of your W-2s or tax returns.

• Third, your loan balance cannot increase to cover closing costs. You can only add the upfront portion of the required mortgage insurance premium to the balance of your loan. So, the new loan balance can’t exceed the current amount outstanding, plus the upfront portion of the mortgage insurance premium. You’ll either have to pay the closing costs upfront in cash, or qualify with your lender for a zero-cost FHA Streamline refinance.

• Finally, the refinance must have a purpose that benefits the homeowner, such as significantly lowering the monthly mortgage payments, or moving from an adjustable-rate mortgage to a more stable fixed-rate mortgage. If lowering the monthly payment is the purpose, you must be able to demonstrate at least a 5 percent drop in your monthly mortgage payments, including the mortgage insurance premiums.

The FHA frequently updates these mortgage guidelines, and individual lenders may add their own specific requirements, so it’s best to check with your preferred lender to determine your exact situation. Also, if your original FHA mortgage was closed after May 31, 2009, the mortgage insurance premiums most likely will be significantly higher, so make sure to evaluate those costs carefully versus the savings you’ll receive from the lower interest rate.

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*

Louisville, KY 40222*

FHA Mortgage Insurance for Kentucky Mortgage Loans

Kentucky Mortgage Requirements for Fico and Credit Scores for FHA, VA, USDA, and Conventional loan programs

FHA Mortgage Insurance for Kentucky Mortgage Loans

UFMIP FHA Premiums for Kentucky Mortgage Loan Below



Effective for case numbers assigned on and after April 18, 2011, the following premiums apply: LTV



Up-Front and Annual Mortgage Insurance Premium


Mortgage Term Greater Than 15 Years



Purchase and Refinance



Streamline Refinance



> 95%


1.00% / 1.15%

1.00% / 1.15%


< = 95%


1.00% / 1.10%

1.00% / 1.10%


UFMIP for Refinance Transactions for a FHA Mortgage Loan

The amount of unearned premium refunded, if applicable, depends on when the mortgage was closed.

The following requirements are applicable to Regular and Streamline Refinances (except those Streamline Refinances of mortgages closed before July 1, 1991):

FHA Mortgages closed after July 1, 1991, but before January 1, 2001: The seven-year unearned premium refund schedule shown in Mortgagee Letter 94-1 remains in effect.

Mortgages closed on or after January 1, 2001, but endorsed before December 8, 2004, that are subsequently refinanced: The five-year refund schedule shown in Mortgagee Letter 00-46 applies.

Mortgages endorsed on or after December 8, 2004, that are subsequently refinanced: The mortgage will not be eligible for a refund of the UFMIP except when the borrower refinances to another mortgage to be insured by FHA. The three-year refund schedule shown in Mortgagee Letter 05-03 applies.

Streamline Refinances of Mortgages:


Closed before July 1, 1991: These loans remain exempt from the annual premium and are charged an upfront premium of 1.50%.

Case numbers assigned between July 14, 2008 and September 30, 2008: (ML 2008-16)

UFMIP: 1.00%

Annual MIP: .50%

The MIP for the subsequent Streamline refinance is based on the credit score and loan-to-value for the existing mortgage being refinanced.

If the streamline refinance is “credit qualifying” with or without an appraisal, the MIP is based on the new credit score and the loan-to-value from the existing mortgage being refinanced.

Cancellation of MIP

The annual MIP may be canceled by HUD once the unpaid principal balance reaches 78% of the lower of the initial sales price or the appraised value based on the initial amortization schedule.

FHA’s calculation of the 78% threshold is based on the:

Loan amount, excluding the UFMIP.

Initial sales price or original appraised value, whichever is less.

MIP cancellation of a Streamline Refinance without an appraisal is determined based on the “original appraised value” provided by HUD.


: Regardless of the computed loan-to-value ratio, all but 15-year term mortgage will have annual premiums for the greater of five years or until the amortized loan-to-value reaches 78%. Refer to Mortgagee Letter 00-46.

MIP Requirements

Refinance mortgage insurance premium (MIP) requirements are the same as for purchase transactions.