| If your adjustable rate has pushed your mortgage | | | | amount, FHA backed mortgage refinancing could be |
| payment to unaffordable levels, you may have some | | | | your answer. |
| relief. In response to the crisis of people facing default | | | | Apparently, the FHA's focus will remain on looking to |
| on their home mortgages because their adjustable | | | | the good credit profile of applicants rather than a credit |
| rate mortgages are no longer affordable, the Federal | | | | score, And, until now, the FHA has not permitted |
| Housing Administration is coming out with the FHA | | | | delinquent borrowers to qualify for their loan program. |
| Secure Refinance Program. | | | | To qualify, you must show... |
| The new FHA Secure program would help home | | | | -That your loan is a non-FHA ARM. |
| owners who have fallen behind on their home | | | | -A history of on-time mortgage payments "prior" to the |
| mortgage and are possibly facing foreclosure because | | | | borrower's ARM loan resetting to the higher rate. |
| of their new higher monthly payments. The new | | | | -The Arm loan interest rate must have either reset or |
| program would allow the delinquent home owners to | | | | be scheduled to reset between June 2005 and |
| refinance their Adjustable Rate Mortgages into a fixed | | | | December 2009. |
| rate FHA loan. The FHA Secure program is intended | | | | -Mortgage late payments are allowed after the reset |
| to help homeowners that may have been tricked into | | | | date if they are directly related to your higher loan |
| expensive Adjustable Rate Mortgages with teaser | | | | payment. In addition, if you are in a mortgage payment |
| interest rates. If you qualify for an FHA mortgage your | | | | plan because of late payments and there is sufficient |
| loan will be funded by a conventional mortgage lender. | | | | equity in the home, the late amounts can be rolled into |
| Remember, FHA mortgage loans are insured by the | | | | the new loan. |
| Federal Housing Administration. The FHA does not lend | | | | -A minimum of 3% cash or equity in the home. |
| money; they simply insure your debt with an approved | | | | -A sustained history of employment. |
| FHA lender. | | | | -Sufficient income to make the new mortgage |
| Because your mortgage is insured against default by | | | | payment. |
| the government, FHA loans offer significantly less risk | | | | While the new program will help those borrowers who |
| for lenders, allowing homeowners, even those with | | | | qualify save their homes, it is obviously not a free ride. |
| poor credit, to qualify for lower mortgage rates. The | | | | It is designed for homeowner's who just need a little |
| FHA will accept homeowners with blemished credit... | | | | assistance in order to get out from underneath |
| especially if you are working on improving your | | | | expensive ARM interest rates. |
| finances and can document your current situation. In | | | | The FHA will not insure interest-only or Pay Option |
| the past, the FHA has not required borrowers to have | | | | ARMs; and will not help home owners who have |
| a minimum credit score. Instead, they have focused on | | | | properties that have depreciated in value and are now |
| one's overall credit history. | | | | worth less then the current mortgage balance. You |
| Therefore, it may be possible to qualify even though | | | | must use an FHA approved lender to see if you |
| you may have a low credit score, perhaps 500 (or | | | | qualify for the FHA Secure Refinance Program. |
| less). If you are a homeowner with tarnished credit and | | | | While this program may not help everyone, it certainly |
| are concerned that the current "mortgage crisis" will | | | | doesn't hurt to see if you qualify. It could be a resource |
| prevent you from refinancing before your lender | | | | to take your ARM to a fixed rate mortgage that is |
| begins adjusting your interest rate and payment | | | | actually affordable. |