Kentucky FHA Mortgage Lender

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.

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

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