How does a Kentucky USDA streamline mortgage refinance work?
Streamline means you don't have to do a lot of things usually required for a regular mortgage transaction, and is is faster than with most types of refinances. You usually don't need to get an appraisal, and in some cases, you don't even need to show your credit score or debt-to-income ratio, income documents, like paystubs, bank statements, tax returns etc.
You have two options in regards to a streamline refinance: your USDA refinance, you have two options: a USDA streamline refinance and USDA streamlined assist refinance.
They are both tools for refinancing from one USDA mortgage into a new one, and in most cases, neither requires an appraisal. But there are some key differences between the two.
You can do either type of refinance if you have a USDA direct loan (one straight from the USDA) or a USDA guaranteed loan (one you got from a private lender that's backed by the USDA).
You shouldn't need to get a new appraisal with either refinance, unless you have a direct loan and have collected a payment subsidy.
With a USDA streamline refinance, you need to show the lender your credit score and debt-to-income ratio to qualify. You can add or remove someone's name on the mortgage.
A USDA streamlined assist refinance does not require you to show your credit score or DTI ratio. You can add someone's name to the mortgage, but you can only remove a name if the person has died.
Your choice between the two will come down to your situation. For example, you might prefer a USDA streamline refinance if your credit score has improved since you got your initial mortgage, because a better score can land you a lower interest rate.
As these two types of refinances work a little differently, each one has its own rules about who is eligible.
How to qualify for a Kentucky USDA streamline refinance
You should already have a USDA mortgage, either a direct or guaranteed loan. You can't use a USDA streamline refinance to refinance from another type of mortgage into a USDA loan like FHA, VA, Conventional.
Current on payments. You must have made all mortgage payments on time for at least the last 180 days.
Time restraints. A minimum 12 months should have passed since you closed on your original USDA mortgage.
Credit score and debt-to-income ratio. You must show your credit score and DTI ratio. ForFor a USDA mortgage, you'll likely need a 640 score and DTI ratio of 41% or lower.
No cash out. You can't use a USDA streamline refinance to receive cash. Unlike other types of mortgages, USDA loans don't have a cash-out refinance option.
USDA streamlined assist refinance
Have a USDA mortgage. You should already have a USDA direct or guaranteed loan. A USDA streamlined assist refinance won't refinance another type of mortgage into a USDA loan.
Current on payments.
You need to have made all mortgage payments on time for at least the last 12 months.
Tangible financial benefit. The USDA requires a streamlined assist refinance to put you in a better financial position than your initial mortgage. Your principal, interest, taxes, and insurance payments must be at least $50 less per month
No cash out. You can't refinance to receive cash. Unlike other types of mortgages, the USDA doesn't have a cash-out refinance option.
You must have a current USDA mortgage loan to streamline refinance to a new USDA mortgage loan in Kentucky.
Joel Lobb
Senior Loan Officer
(NMLS#57916)
Text or call phone: (502) 905-3708
email me at kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the views of my employer. Not all products or services mentioned on this site may fit all people
