GA Bad Credit Refinance: Use FHA To Save Your Home From Your Rising ARM Rate

Every few minutes all day there is a new headline trumpeting the meltdown of the mortgage industry or another lender going down the tubes. It is becoming more difficult to obtain a conventional mortgage every day. Qualification guidelines are tighter than they have been in years and getting tighter. Mortgage insurance guidelines are changing faster than loan officers can keep up. Commentators on the news are even mistakenly saying the only way to get a loan is to have perfect credit and to need to borrow less than 80% of the value of your home.

This meltdown is occurring at the same time a record number of adjustable rate mortgages are set to begin their rate adjustments. Because these ARMs usually had initial teaser rates that were artificially low, if you have an adjustable rate mortgage there is a near 100% chance that your rate will be going up. Most of the time, this first rate adjustment will be several percentage points. It is not uncommon right now for a mortgage that has had an interest rate in the low 5's to be adjusting up to the 8 or 8.5 percent range! If you have a subprime loan, this increase may be from 7.5 percent to 10.5 percent or more! Borrowers who are unprepared for this will have their mortgage end up as part of the delinquency rate statistics talked about on the evening news.

If you do not fit into the new tighter conventional mortgage guidelines because of credit problems or because your home's value has not risen as quickly as you planned, there may be a very good option if your loan amount is below $252,890 in more populated Georgia counties and $200,160 in more rural Georgia counties. That solution is to use an FHA loan.

FHA loans allow you to refinance with higher ratios of debt in relationship to your total income. FHA loans allow you to get a mortgage even with credit problems as long as you have a good explanation and the problems have been solved or the new mortgage will help solve them. FHA loans also allow a loan amount that is as high as 97% of the value of your home if necessary.

Don't just give up if you currently have an adjustable rate mortgage and you know the payment is about to go up. Call a HUD approved FHA lender to find out if this very good option is open in your situation. You may be very glad you did.