FHA Streamline refi:Can lender credit from rate increast be used for closing costs and pre pds?I am looking into FHA streamline refi. Refi amt is 208k. Lender is offering 3.75% with credit of 2293. Howver, the total closing costs (excluding pre-paids) is LESS than the total credit and I am being told that my rate will not be reduced, but my credit WILL be reduced to a dollar igure which only covers the closing costs. Once all closin costs are subtracted from the credit , there is still $329 of the credit left. Why can't i apply that to my pre-paids (escrow and daily interest) if my rate will not be adjusted down slightly when the credit is adjusted down? Seems that the credit must be calculated as a percentage of the loan amount, and that % is determined by how much the rate is increased (from 3.5 to 3.75 in my case) Is this fair?August 20 2012 - US00YesReport a ProblemProblemSelect oneOffensive contentIrrelevant contentSpam (pure self-promotion)OtherDetailsYour emailPlease enter a valid email address.Submit CancelContent flaggedWe will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.We're sorry. This service is temporarily unavailable. Please come back later and try again.