FHA Secure Home Loans

The new FHA Secure loan program has helped thousands of families keep their homes in the face of default and foreclosures. The FHA started the Secure loan program because of the predatory lending practices that were sweeping the country. Many lenders were allowing loans to be processed that shouldn’t, and as a result many people borrowed money to purchase a home that they could not really afford.

A lender has certain criteria which they follow to determine how much of a monthly mortgage payment a borrower can afford. This is based on their income, expenses, and debt. The problem was that many lenders were allowing flexible income to be used to qualify borrowers for higher amounts. The lenders were also offering borrowers no interest loans, adjustable rate loans, or balloon loans even though based on the borrower’s income there would be no way that they could continue to make their mortgage payments once the initial no interest period, fixed interest rate period, or balloon was over and the higher amounts of money were due.

This all caused many borrowers to lose their homes and foreclosures skyrocketed. Then the FHA stepped with their Secure program in order to help homeowners get refinanced into a lower more affordable interest rate similar to what they had when they originally took their loan.

Some of the facts regarding the FHA Secure loan program are:

• You must have a mortgage that has an interest rate that will soon become adjustable or has already begun to adjust to a higher rate.
• You DO NOT have to already be in default to get an FAH Secure refinance. The FHA has had some questions regarding confusion in this area, and they have recently stipulated that they encourage people to come to them and refinance before their rate becomes adjustable in order to avoid any derogatory credit history.
• You are allowed to have derogatory credit due to your missed or late mortgage payments as a result of an adjustable interest rate mortgage or a balloon payment that came due.
• You must have been making your payments on time before your interest rate became adjustable.
• You CAN be in default with your current mortgage lender and still qualify for an FHA Secure loan. The FHA is trying to help people keep their homes by offering lower interest rate refinancing. This means that if you are in default with your loan you can still qualify for this loan as long as you meet all other lender criteria.
• You do have to qualify for a home loan mortgage under all other lender requirements. You will still need to prove your income, credit report, employment, and the home will have to be appraised at a reasonable value compare to the loan amount.
• You may have to have mortgage insurance as part of the FHA Secure loan program. The FHA requires mortgage insurance to be carried until the borrower has accumulated 20% equity in the home.

If you are a homeowner who is stuck in a loan as a result of predatory lending practices or can no longer afford to pay your monthly mortgage payment due to an increase in your interest rate you may qualify for a loan refinance through the FAH Secure loan program. Go to www.fha.gov for more information.

To learn more about VA Loans, FHA Loans, and Refinancing you can return back to the Getloaned.com homepage