How much are the FHA closing cost credits when you streamline?

How much are the FHA closing cost credits when you streamline?

1 Answer

Great question, and the short answer is "it depends". For all FHA streamline transactions, you will have title and recording fees, along with whatever lender calls their underwriting/processing/origination fees. There will also be minor charges for things like flood cert fees and credit reports. The title fees in particular vary by state (and some state do charge additional taxes on refinances), so it's hard to give exact numbers. In Missouri and Illinois, you might expect around $1500 in total lender and title costs, in attorney states such as Oklahoma, the total would be more.
The biggest variation in costs for FHA streamlines are from HUD itself, depending on when your existing loan was taken out. IF HUD endorsed your current loan before 5/31/2009, they charge an upfront mortgage insurance premium (can be added to the new loan) of .01% ($10 on a $100,000 loan). Obviously, this isn't a cost anyone would mind to save money! If, on the other hand, the current loan was endorsed AFTER 5/31/2009, HUD charges an upfront MIP of 1.75% ($1750 on the same $100,000 loan, a huge difference). In addition, the monthly mortgage insurance premiums have been raised periodically, and for some borrowers, doing a streamline results in significantly higher mortgage insurance costs monthly. One thing to consider is that lenders can also USUALLY cover most or all of the closing costs on these loans for their clients. For FHA (and VA) streamlines I do, I typically cover at least the majority of the costs, allowing my clients, no matter what state they're in (I write loans in all states) to lower their rates and payments with minimal out of pocket costs. Bottom line, the best way to find out costs for an FHA streamline is to speak with a lender who can give you precise information based on your particular situation. If you have your mortgage statement handy when you're speaking with them, you'll get more accurate information back. It's also very helpful if you know when your previous loan closed. I know this is a lengthy answer, but it's a complex question. If anyone has interest in more information on FHA or VA streamlines (no appraisals needed!), feel free to give me a call. Ted Rood, Wintrust Mortgage, 314-740-0004