Got USDA Loan? The USDA Streamline guide to a lower interest
*Updated as of December 2016 – net tangible benefit requirement lowered to $50 !
Ok, ok, maybe I went a bit overboard with the cow. USDA Rural Loans don’t need to be that rural!
If you have such a loan (the cow is optional), know that there is an easy option to refinance it. No appraisal, no income documentation, just a lower interest rate – that sums up the Utah USDA Streamline option.
The USDA Streamline Refinance will help if your home is underwater on the value, or if you’re not declaring the milk on your tax returns – therefore not showing enough income to re-qualify for a mortgage!
In order to streamline your Utah USDA Rural Loan, you must meet the following requirements:
1. You must have owned the home for at least 1 year, and the loan on it must be a USDA mortgage loan (you can’t streamline an FHA into a USDA loan for example – that would require an appraisal as well as income documentation). You are still good even if the area itself is no longer eligible for USDA loans.
2. The home must still be your primary residence
3. You must have made payments on time for the past 12 months
4. 620 minimum credit score (if you’re not quite there, contact me for assistance).
5. The interest rate must decrease by at least 1% Guidelines changed: as long as your payment is decreased by $50 or more, you can streamline your USDA loan.
6. The new loan amount cannot exceed the original loan amount. The maximum loan amount may include the principal and interest balance of the existing loan, eligible loan closing costs, funds necessary to establish a new tax and insurance escrow account, plus the up front guarantee fee (currently at 1% – see current Utah USDA Rural Loan guidelines). That means no cash-outs allowed.
If you’re ready to start saving money, go ahead and apply online.
If you still have questions, or have a trickier loan situation, send me a quick email at firstname.lastname@example.org or call/text me at (801) 473-3154
For Pre-Qualification Letters on new USDA purchases… see either of the above