| What are FHA Secure Loans? | | | | loan open even if this means you owe more on your |
| FHA secure loans is a program that allows | | | | home than it is worth. For example if you originally |
| homeowners with non-FHA adjustable rate | | | | purchased your home for $250,000 and took out an |
| mortgages, current or delinquent, the ability to refinance | | | | 80/20, you would have a first mortgage for $200,000 |
| into a FHA insured mortgage. The homebuyer must | | | | and a second mortgage for $50,000. If your present |
| have been current on their mortgage payments prior | | | | home is valued at $220,000 then you would be upside |
| to the adjustment of their variable interest rate and | | | | down $30,000. Your new FHA first mortgage would |
| must be able to document that the change in their | | | | be $213,400 which is 97% of the new appraised value. |
| interest rate has caused them to become delinquent. | | | | Your present lender on your second mortgage must |
| How Much Can I Refinance? | | | | be willing to sign a subordination agreement which |
| The amount you may refinance will depend on the | | | | allows the second to remain open and keeps them in |
| present value of your home and how much you | | | | 2nd position. |
| currently owe on your home. FHA requires that you | | | | How Do I Qualify? |
| have at least 3% equity in your home. Most | | | | Finally, you must be able to qualify for a FHA loan. |
| homebuyers will not be able to meet this standard | | | | FHA loans are full documentation only. This means that |
| because they bought their home with little or nothing | | | | you must be able to provide pay stubs, W2's and tax |
| down. In addition we have experienced a decrease in | | | | returns to support your income. Many buyers who |
| our home values. Should this be the case, you would | | | | originally purchased their home with stated income |
| need to contact your present lender and ask them to | | | | loans will not be able to qualify today. You may be |
| "forgive" some of your loan balance or find a lender | | | | asking yourself why should I consider this option? The |
| that is willing to provide a second mortgage for the | | | | answer is very simple. FHA loans do not have "teaser |
| difference. Securing a second mortgage in today's | | | | rates", prepayment penalties or balloon payments. FHA |
| market is very difficult to do. | | | | loans are offered at market rate and are fully |
| What if I have a Second Mortgage? | | | | amortizing loans which means that you are reducing |
| If you already have a second mortgage on your home, | | | | your principal loan balance each month. |
| FHA will allow you to keep your second mortgage | | | | |