Definition
A streamline refinance (especially for FHA and VA loans) bypasses traditional full underwriting, requiring minimal documentation and fast approval. FHA streamlines can reduce rates as little as 0.5%, while VA IRRRLs don't require appraisals or inspections.
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Streamline refinances bypass traditional full underwriting and income verification, instead requiring only basic documentation. FHA streamlines can reduce rates by as little as 0.5%, while VA IRRRLs (VA streamline equivalent) don't require a value or inspection. These programs carry lower closing costs and close faster than standard refinances. Some streamlines allow cash-out up to certain limits without full re-underwriting.
Pro Tip
Streamline refinances are ideal when rates drop at least 0.5%; the reduced closing costs mean a shorter break-even period.
Example
You have an FHA loan and rates drop 1%. You apply for an FHA streamline; instead of full income verification, the lender only reviews your payment history and closes the loan in 2 weeks.