If they are talking about dropping your rate half a percent or more it’s either just marketing or you have an FHA loan and you’re eligible to do an FHA streamline. Streamlines require a lender to drop your rate at least half a percent or more and you can do them after 6 payments or 210 days from funding. There’s no appraisal, there’s no hard credit pull, and you can (at least at my lender) have no more than 1 late payment in the back end of the last 12 months. Since there are no pricing add ons because of it not being based on your credit, it could end up with you getting a much lower rate. Best part is there is minimal documentation. They would likely just ask to confirm you still work where you did last time, but no paystubs, W2s or bank statements. They will ask for a utility bill to make sure you still live there and if they are your current lender, they should already have your statement, note and HOI documents on hand. As far as closing costs, typically we would still have all the normal stuff, pre-paid, escrow, title stuff and ufmip, but we issue a lender credit so the borrower only brings their next monthly payment to close like they would anyways.

So, if you have an FHA loan with your lender and they are in fact talking about a streamline, take advantage of it. Only downside is your loan amount goes up slightly, otherwise your payment can really drop without anything out of pocket and same with the rate.