Section 4: FHA Streamline First-Time Homebuyers

NOTE: Maybe you are looking to do a FHA Streamline and your home and this is the first and only home you have ever bought. Although that does fit the criteria for a first-time home buyer it is important to remember that FHA Streamline are not traditional first-time home buyer programs. Although this section will talk about the benefits of being a first-time home buyer, please do not confuse this program if you are indeed a first-time homebuyer. 

 Purchasing Your First Home

Purchasing a first home is an exciting milestone in any person's life. For some, the process may also seem very intimidating. Buying a home can be challenging for a first timer. After all, there are so many steps, tasks, and requirements, and you may be anxious about making an expensive mistake. But first-time homebuyers actually enjoy some special advantages created to encourage new entrants into the real estate market. Please don't hesitate to give us a call or start your quote online.

How Much Home Can I Afford?

Typically, the first question would-be homebuyers ask themselves is, "What can I afford?" There are many factors that determine what a reasonable mortgage payment should be for an individual, including annual income, existing debt payments, down payment (if any), as well as additional costs like homeowners’ insurance and housing association fees. Orbit Home loans provides a handy VA Loan Payment Calculator to help homebuyers find a monthly payment that's comfortable for them.

FHA Streamline Payment Calculator →

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What Type of Loan Should I Get?

There are many financing options available for homebuyers out there, each with their own unique advantages. For most borrowers, we at Orbit Home Loans highly recommend the working with one of our loan officers to find out what best fits your needs. Of course, if you are still researching then you can continue to explore our many loan options here on our website.

Advantages of a FHA Streamline:

1. Interest Rate

You can reduce the interest rate on your current mortgage without a full credit check, yet you need to have paid your mortgage on time over the last 12 months. 

2. Income Verification

There is no requirement for income verification.

3. Reduced Paperwork

FHA Streamline loans have reduced paperwork, simple requirements for eligibility, and a list of features which makes it very attractive for borrowers

4. Debt-to-Income

If you have an existing FHA mortgage, you've already proven you are a good credit risk for an FHA-guaranteed loan. Because of this, you don't need to calculate a debt-to-income ratio for the new FHA Streamline loan, but it's always a good idea to have a second look at your finances for your own information.

 5. Net Tangible Benefit

The FHA actually requires that there be some advantage for the borrower if they go ahead with a Streamline Refinance. If refinancing makes it easier for you to make your monthly payments on time, then the FHA is off the hook for reimbursing your lender in the case of you defaulting on your mortgage. For a reduction in the term of the mortgage to be considered a net tangible benefit, certain things must apply. The remaining amortization period of the current mortgage bust be shortened, the new interest rate should not exceed the original one, and the principal, interest, and MIP payment of the new mortgage must not exceed the combined amount of the existing mortgage by more than $50.

6. PMI

   An FHA Streamline Refinance can help homeowners lower their annual mortgage insurance premium (MIP) or even get a partial refund of their upfront MIP payment.

7. Credit

A standard minimum credit score for the FHA streamline refinance program is 640. However, some lenders may allow a score between 600-620.

 8. Appraisal

In many cases, you can refinance with FHA Streamline without a new appraisal on your home. More lenient credit requirements to refinance compared to most other loans.

9. Assumability

According to the Department of Housing and Urban Development (HUD), all FHA-insured loans are assumable if the new borrower can qualify for the loan and the existing loan has no restrictions placed on it.

Getting Preapproved

The first step toward securing your loan is getting pre-approved. This involves a prequalification process, where a loan officer assesses the homebuyer's financial situation and determines what they qualify for and is followed by the homebuyer submitting a completed loan application to the lender for approval. Orbit Home Loans offers two ways to begin this process: You may either call us directly or reach start the application below to get a complementary call. 

Contact an Orbit Home Loan Professional

Finding a Real Estate Agent

When using a FHA Streamline, it's important to find a real estate agent that not only knows the intricacies of the FHA Streamline Benefit Program, but also understands the specific needs of borrower. Orbit Home Loans has put together a network of friendly real estate agents for just this purpose.

Learn More about Orbit Realty →

Helpful Resources

  •        The Guide to FHA Streamline Homebuying
    Browse our VA homebuyer education and resources page.
  •        FHA Streamline Home Loan Mortgage Payment Calculator
    This free VA Home Loan calculator gives you a snapshot of what your monthly payments could be with a VA Loan.
  •        FHA Streamline Glossary
    Use our glossary to reference any unfamiliar terms or acronyms.

As a first-time homebuyer, you have many options when it comes to purchasing your home - including homes in high-cost areas. 

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