Today we shall do a detailed comparison between the Refinance Without Verification Requirements options and Refinance options With Verification Requirements, and will also tell you their respective detailed features. Also, we shall discuss the different refinance options that are available to customers today, which would successfully meet your needs.
Refinance Without Verification Requirements Options
Refinance Without Verification Requirements:- Here, we shall tell you about Refinance Without Verification Requirements process, and also about the different refinance options that will successfully meet your needs. This will help those people who have already identified why they are refinancing their home.
Generally, people are still not familiar with Refinance Without Verification Requirements process. People believe that generally all kinds of Refinance mortgages or Refinance Loans typically requires the verification of a borrower’s income, assets, and credit. However, there are certain refinance programs for which verifications is not required. These programs are called “streamlined” refinances. They’re called streamlined refinances because their underwriting requirements are grossly simplified and intended to be quick.
With a streamline refinance, mortgage lenders waive large parts of their “typical” refinance mortgage approval process. Often, home appraisals are ignored, income verifications are waived, and credit scores verifications are also snubbed. Once you know why you want to refinance your home, you should also learn more about the different refinance options available for you, that will successfully meet your needs. This article will surely help you select the best Refinance Without Verification Requirements options for yourself.
What is a Mortgage Refinance – Best Explanation [MUST READ]
Below is a breakdown of each refinance option and few general highlights. There are exceptions to each option so please consult with one of our loan officers when selecting the suitable refinance choice for you. Different lenders may deploy different overlays for each of the streamlined programs, but the programs can be summarized as follows.
1. FHA Streamline Refinance
The FHA Streamline Refinance is a kind of Refinance Without Verification Requirements process, which is available to homeowners with an existing FHA mortgage. The FHA Streamline Refinance program ignores all verifications and refinance mortgage or refinance loan rates are as low as with a standard-verification FHA-backed loan.
An FHA Streamline Refinance requires refinancing homeowners to save five percent or more on their mortgage payment; and, to show a history of on-time payments to their lender. Cash-out refinance mortgages are not allowed via the FHA Streamline Refinance program.
The FHA Streamline is for people who currently have a Federal Housing Administration (FHA) loan and want to lower their monthly payments. General highlights of the FHA Streamline are:
- No appraisal on your property is required.
- Income verification Not Required.
- Low fixed rates.
- Lender credit allowed to cover closing costs.
2. VA Streamline Refinance
The VA Streamline Refinance is also a Refinance Without Verification Requirements process and is available to homeowners with an existing VA-backed mortgage. Officially known as the VA Interest Rate Reduction Refinancing Loan (IRRRL), the VA Streamline Refinance option also snubs income, asset, and credit score verifications.
In the VA Streamline Refinance, Refinancing VA homeowners are required to demonstrate that the refinance mortgage will result in monthly payment savings, except for homeowners changing to a shorter loan term, such as from a 30-year mortgage to a 15-year mortgage; or, from an ARM to a fixed-rate loan. Homeowners may not receive cash-out as part of a VA Streamline Refinance.
The VA refinance is a popular program for retired veterans or active military personnel who currently have a VA loan. Similar to the FHA Streamline, the VA streamline is for people who want to lower their mortgage payment without getting cash out. Some of the typical details behind a VA refinance include:
No appraisal required.
Income verifications are not required.
No Credit score verification by HUD, but some circumstances may require a minimum credit score.
Low fixed rates.
Reduced funding fee requirement.
Lender Credit allowed to cover closing costs.
3. The HARP Loan
The HARP loan is a government-backed refinance program good through December 31, 2016. Its official name is the Home Affordable Refinance Program. HARP is the Fannie Mae/Freddie Mac-equivalent of the FHA Streamline Refinance or VA Streamline Refinance Without Verification Requirements options.
In order to qualify for a HARP loan, homeowners must a have a mortgage backed by Fannie Mae or Freddie Mac which predates June 2009; must show a 6-month history of on-time payments; and, may not have already used the HARP loan to refinance.
It’s a streamline refinance for conventional home loans.
HARP loans do not allow cash-out to the homeowners.
Rate-and-term refinance mortgages only.
4. USDA Streamline Refinance Program
The USDA initiated a pilot refinance program to help current USDA homeowners reduce their payments quickly and easily. And they wanted to make it available even to those who owed more on their home than it was worth. Now, this is no longer a pilot program. It has been rolled out nationwide as Refinance Without Verification Requirements option available.
At the end of the 2000s, home prices plummeted, leaving millions of homeowners underwater on their mortgages. Those who purchased with the popular USDA loan were no exception.
The USDA Streamline Refinance Program is an Refinance Without Verification Requirements program, which is available to homeowners with existing USDA home loans.
USDA loans are loans for homeowners in rural or suburban areas which allow for up to 100% financing.
The USDA streamline refinance program was only available in 34 states. Now, this option is available to USDA homeowners in all states.
The USDA Streamline Refinance Program does not verify income, assets or credit.
Homeowners using the program to refinance are limited to 30-year fixed rate mortgages and 15-year loans. ARMs are not allowed.
Refinance Options With Verification Requirements:-
Till now have discussed the Refinance Without Verification Requirements Options, but there are the two other methods which DO require a complete verification process. These two methods are Conventional Refinance & Cash-Out Refinance. Cash-out refinance mortgages are not allowed via the USDA Streamline Refinance.
Below mentioned is a detailed overview of the Conventional Refinance & Cash-Out Refinance options.
1. Conventional Refinance
If your mortgage is backed by Fannie Mae or Freddie Mac, it is a “conventional” loan. Refinancing a conventional loan is a common refinance option. Typically, a conventional refinance includes:
An appraisal of your property is required
Full employment and income verification is required
Employment history of two years
Minimum Credit Score of 620
95% loan-to-value (LTV) with mortgage insurance required, 80% LTV without
Lender credit allowed to cover closing costs
It is common to move from a 30 to a 15 year fixed term
2. Cash-Out Refinance
Cash-out refinance mortgages are not allowed via the USDA Streamline Refinance. For those that want to convert your home equity to cash, there are programs called “cash-out refinance” programs.
Conventional Refinance, FHA Refinance, and VA Refinance loans all have different cash-out requirements, so check with one of our mortgage experts depending on your loan. In general, there are aspects you can expect:
Full income and employment verification
85% loan-to-value for FHA; 80% for conventional; 100% for VA
Lender credit allowed to cover closing costs
So this was the detailed comparison between the options of Refinance Without Verification Requirements and Refinance options With Verification Requirements, along with their salient features. If you have doubts or queries regarding How to get Refinance Without Verification Requirements, you may ask us here in the comments section below.