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How to Calculate the Maximum Loan Amount on an FHA Streamline With Appraisal

how to streamline an fha loan

Calculate the maximum loan amount for an FHA streamline refinance using your home's current appraised value.

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Homeowners with mortgages insured by the Federal Housing Administration have the opportunity to obtain an expedited refinance. An FHA streamline refinance involves paying off an existing FHA loan with a new FHA loan with better terms. Designed to lower monthly principal and interest payments, the FHA streamline can be completed with or without an appraisal. Borrowers who order an appraisal can use a new, higher appraised value to increase their loan amount and cover refinance closing costs. To calculate the maximum loan amount on an FHA streamline refinance with appraisal, use the home's newly appraised value.

Obtain an appraisal report from an FHA-approved appraiser. Your lender, which also must

have FHA approval, orders the appraisal on your behalf. The appraiser completes an interior and exterior property inspection and compares your home to similar nearby homes that recently sold in order to estimate the value. An FHA appraisal costs the same as or more than standard appraisals, but the appraisal company, property size and property location affect appraisal price. FHA appraisal reports usually cost between $350 and $450.

Multiply the home's value as reported on the appraisal by 97.75 percent of the home's value, if that is the maximum loan calculation that applies to you. For example, 97.75 percent of a $200,000 home is $195,500. Add to this loan amount the new UFMIP amount based on a 1.75 percent rate, which is $3,421.25. Your maximum loan amount is $198,921.25.

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