Question4: If a bank account is required, can a debit card be used.  

Justin and Aaron, I am interested in using the auto-debit so that I am always on time and I also heard that it adds credibility to me.

The lender will have to raise your rate high enough to not only pay all your closing costs, perhaps your prepaid interest, tax, insurance, but also to generate enough LC (lender credit) to pay for the UFMIP difference as well (refunded UFMIP - new UFMIP) in order to make your FHA streamline refinance a "complete no cost."

If the tenant doesn't have a bank account you can suggest alternative banking, credit unions, or prepaid debit cards if you're doing online payments.

Then you just send a written reminder a few days before each “extension” kicks in out of their prepaid reserves and hope you don’t get to where you don’t have enough to cover discovered damage. 

PrepaidsHomeowner's Insurance Premium ( months)Mortgage Insurance Premium ( months)Prepaid Interest ($28.50 per day for 17 days @4.75 %) $485Property Taxes ( months)G.

Just be sure to follow state laws regarding your escrow/trust account (where you hold tenants' security deposits, prepaid rent, etc) - Those normally must be held in a separate account and cannot be commingled with operating funds. 

You can direct debit straight from your tenants checking account.

Which is what you would have to do if someone has prepaid their rent but is in violation on other terms of the lease.

I am just waiting to hear from Cozy to see if the auto debit goes threw on the 13th.