USDA Streamline Refinance
The USDA Streamline Refinance Program is designed to lower your interest rate by refinancing your existing USDA loan. If you are currently in a USDA loan and would like to lower interest rate by refinancing, the USDA has made it easy for you. Since you are already qualified for a USDA loan initially it’s a very simple and quick process to lower your monthly mortgage payments by taking advantage of this popular streamline refinance program.
Why Are Streamlines So Great?
The USDA Streamline Refinance Program has reduced documentation, does not require an appraisal and is setup to let you get a lower interest rate in the easiest possible way. If you are currently in a USDA and would like to lower your mortgage payment the USDA streamline program can help you take advantage of historically low rates.
What Are the Advantages of A Streamline?
- Fast turnaround time
- No appraisal required
- No income verification
- No debt to income calculation
- Streamlined paperwork process
What Are the Requirements?
- Minimum credit score 600
- Must lower your interest rate by 1%
- No late payments over 30 days in last 12 months
What About The USDA Funding Fee?
The USDA funding fee for streamlines is collected by lenders at closing and is financed into the loan which helps offset the cost to fund the USDA program. There is also monthly mortgage insurance on all USDA streamlines.
- Your monthly mortgage insurance will be .40% and 2.0% for the funding fee
Frequently Asked USDA Streamline Questions:
What are the documents I will need?
- Copy of driver’s license
- Copy of social security card
- Copy of your mortgage note
- Copy of mortgage statement
- Contact information for insurance agent
Is it possible to skip (2) mortgage payments?
In some cases it may be possible to skip (2) mortgage payments as part of your USDA streamline. It will depend on when in the month you close your loan.
There is little to no equity in my home, can I still refinance?
Yes you can. A USDA streamline will allow you to refinance without an appraisal
Can I remove someone from my loan as part of the streamline?
No the lender will only allow a person to be removed if they are deceased.
Will my loan amount increase by doing a Streamline?
If you choose to roll in your closing costs instead of paying for them a closing your loan amount will increase by this amount including the USDA funding fee. But by skipping up to (2) mortgage payments in some cases, receiving escrow money back after closing, and the savings per month your breakeven on the streamline is realized very quickly.
Do they look at my payment history?
Yes a lender will review your mortgage payment history. In order to qualify you cannot have any late payments of 30 days in the last 12 months.
Can I do a cashout or pay off debt as part of my streamline?
No, you can only reduce the interest rate on your current mortgage as part of the streamline. The program requires a net tangible benefit which means you have to lower your rate by at least 1% to qualify.