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FHA Secure Refinancing
The Federal Housing Administration (FHA) was established in 1934 to offer mortgage insurance on loans through FHA-approved lenders. The FHA insures mortgages on single and multi-family homes, and other approved purchases such as manufactured homes. The FHA does not issue the loans themselves, but FHA mortgage insurance is quite attractive for a prospective lender because FHA mortgage insurance protects the lender's investment. Should a homeowner default on the mortgage or go into foreclosure, the FHA pays the lender.
Loans insured by the FHA feature low down payments, and costs for FHA mortgage insurance are built into the mortgage payment. Those costs disappear five years into the loan or when the loan reaches 78% of the property value (whichever is longer).
Many homeowners with adjustable rate mortgages find themselves in financial trouble because of current interest rate increases. Foreclosure is a bigger threat than ever, but fortunately the FHA has stepped in to help with FHA Secure Refinancing. Starting July 14, an expanded FHA Secure refinancing plan allows homeowners who have missed up to three mortgage payments in the last 12 months under certain circumstances to avoid foreclosure with FHA Secure.
You don't need an existing FHA home loan to qualify for an FHA Secure refinance loan - the program is designed to specifically to help those without FHA loans to get lower payments, prevent default and foreclosure, and protect their investment.
- Homeowners with current or delinquent non-FHA adjustable rate mortgages are eligible.
- You are not automatically disqualified based on delinquency on your current loan.
- You must have a dependable income and be able to make your mortgage payment.
- If you are in default, you must show delinquency or default is the result of increased interest rates and the resulting higher mortgage payments.
- If you are current on your mortgage payments, any type of conventional loan is eligible for FHA Secure refinancing.
In addition to these specifications;
- "Those who are current on mortgage payments can refinance non-FHA fixed rate or adjustable rate mortgages. Those who are behind on their mortgage payments may only refinance adjustable rate mortgages.
- "Borrowers may be required to verify their mortgage payment history through the mortgage servicer or with cancelled mortgage payment checks.
- "Cash out refinancing" is not eligible under FHA Secure.
FHA Secure refinancing is available for single-family or multi-family homes and manufactured homes. A new FHA premium pricing plan goes into effect on the same date the expanded FHA Secure refinancing program begins, July 14 2008. Borrowers should know this "second chance" refinancing does not indicate relaxed requirements for credit. Borrowers applying for FHA Secure are subject to the same requirements as any other applicant for an FHA loan. Delinquency issues for mortgage payments aside, loan officers still require proof you are a good credit risk. Borrowers should;
- Have steady income from a dependable source.
- Show a reliable payment history on other debts.
- Have a debt-to-income ratio below 41%.
- Have a credit score appropriate for any home loan.
If you are need further explanation of the terms or conditions of FHA Secure, be sure to ask your loan officer for clarification before you sign. Apply Now
ADDITIONAL INFORMATION
The new FHA Secure Loan Refinance Program may be perfect for you if you are a homeowner currently in default because of an increased interest rate on your home loan. The FHA is breaking new ground with its secure refinance loans, which offer homeowners who are defaulting on their loans and in jeopardy of being foreclosed upon another chance to keep their homes.
You could qualify for the FHA Secure Loan Program if, by way of mortgage contract and credit history, you are able to show that you have an adjustable rate mortgage loan and are in default as a result of an increased interest rate on your home loan.
The idea behind an adjustable rate mortgage is that a lender gives a borrower a loan based on the borrower's current income level, expecting the owner's income to increase as time passes. Over the past few decades, however, we have seen interest rates spike to unpredicted levels, as well as stagnant salary increases due to the poor economy. Now that many of these mortgages have had time to "adjust", many homeowners are having difficulties making their payments on time and in full. Through the FHA Secure Loan Program, the FHA wants to help homeowners in these situations avoid foreclose and keep their homes.
The FHA Secure Loan Program is in a position to help more than just single family homeowners. If you have one of the following types of homes and are in default because of a high interest adjustable rate mortgage, the FHA may be able to help.
The FHA Secure Loans are available on the following types of homes:
- Single family homes
- Manufactured homes
- Multi-family homes
Having followed the trends in the current mortgage market, the FHA understands that many homeowners need help to keep their homes. As the government works to change laws and stop mortgage loan companies from engaging in bad lending practices, the FHA is using their new Secure Loan Program to help families refinance and avoid foreclosure.
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| Loan Amount: | |
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| Interest Rate: | |
| Down Payment: | |
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| $509.98 |
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| $183,593.00 |
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