by 
The Curious Bag
-
A streamline refinance is a type of mortgage refinancing that allows a borrower to convert from one mortgage to another with reduced documentation and paperwork. Most often, a streamline refinance is a FHA loan.
Significance
A standard refinance requires a borrower to prove income and reserves, as well as purchase an appraisal. A streamline refinance removes the need for these items.
Function
A streamline refinance allows a borrower to change the rate and term of a mortgage, but does not allow him to use any additional equity in the home. The loan amount must not deviate from one mortgage to the next.
Types
Most streamline refinances are from one FHA mortgage to a new FHA mortgage. It can be for a fixed or variable rate mortgage, with terms ranging from 10 to 40 years.
Considerations
If a borrower is looking to get cash from a refinancing or to consolidate debt, a streamline refinance is not a viable option.
Benefits
A streamline refinance allows a borrower to take advantage of lower interest rates with significantly less documentation and cost than traditional refinancing. .
Source:
FederalReserve.gov: A Consumer's Guide to Mortgage Refinancing
Copyright 2023, Wired Ivy, LLC