Could your adjustable rate mortgage be ready to adjust? Has it adjusted and you are now having problems making your new mortgage payments?
As I stated here, the FHA Secure Loan sounds great, but not all will qualify. But you need to a true mortgage professional to make sure that you would qualify and not just a bunch of broken promises from a sales person.
So what do you need to know to possibly qualify for the FHA Secure loan? Keep in mind, you currently don't have to have a FHA mortgage. But you do have to meet these specific qualifications :
You have to be in an adjustable rate mortgage and current on your mortgage with no lates. No matter what, you have to be current with no lates prior to your mortgage rate adjusting. Now, I was part of the hud conference call and there are circumstances that can come into play, depending on your excuses and reasons why you might have been late. This goes back to normal FHA underwriting guidelines.
You need at least 3% equity in the property.
Interest rates must have or will reset between June 2005 and December 2008.
And lastly, basically you need to qualify like you normally would on previous FHA mortgages. This means that you need a decent to solid employment history to show stability and income that meets the normal qualifying ratios of 31%/43%. Again, it's up to the underwriter who can exceed these ratios, depending on the how solid the borrower is.
The problem with this program and why it hasn't been utilized as much as many people thought it would be is because you need to be current and not late prior to the adjustment. It's meant to be relief for those that will have payment shock. "FHASecure is designed for families who are good borrowers but were steered into high-cost loans with teaser rates," said Assistant Secretary for Housing-FHA CommissionerBrian Montgomery.
For more information, please don't hesitate to call me or e-mail me. 888-835-1663 or jbelonger@ihmci.com
9 Comments on Adjustable Rate Mortgages - FHA Secure mortgages could be your answer....
I'm glad you posted this. I think it is a great program for people who qualify. I have a friend whose payment went up by $500 a month! She has applied for a program through the military but I also told her about the FHA secure loan. How long does a person have to be discharged from a bankruptcy, in order for them to qualify through FHA?
PAM.... thanks. I am not aware of any VA programs that would work like this. But if they can use their VA eligibility, they have good credit, typically the VA options are actually better. In regards to being discharged from a BK? On a ch. 7, 2 years. On a ch. 13? At least paying on it for one year. This might help some : FHA Credit -- Understanding what works
JENNIFER.... hi.. ;o) I don't expect comments on a blog of this magnitude. ;o) Just happy that consumers read this and contact me.
I could see this program helping a few people. What about those that are late prior to refinancing with the FHA secure loan. How strict will they be on this?
Mike, they can be late currently if its after their rate adjusted.
I've had several calls for FHA Secure here in the last month but not one closed FHA Secure loan in our office yet. So many pitfalls where one thing or another knocks it out, either delinquency before the adjustment or in case of one I had recently absolutely no equity and a current lender who will do nothing in terms of accepting a lower payoff. The program states that an existing lienholder can forgive part of the balance or establish a new subordinate lien for the difference. Good luck finding a subprime servicer who is on board with this idea though!
The biggest problem I am seeing in our market (Minnesota) is all those buyers who did ARM's at 100% financing. With the softening markets, these people cannot refinance, as they now OWE more than their homes are worth. It's just so sad. I have received 3 referrals this week for people who want to refinance and they can't because they do not have the value in their homes.
Has anyone here closed any of these yet? I can't find anyone that hasn't had lates on their credit cards. I have customers with perfect mortg historys before the adjustments but when te loan adjusted they became late on everything else too. Have you had this happen?
Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages -- Mortgages Cherry Hill, NJ More about me…
Infinity Home Mortgage Company, Inc
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I just want to educate people about mortgages and the process.
In regards to lending, I am very creative, intuitive, honest, and one who communicates information, may it be good or bad. I am a loan officer that looks out for your best interest.
I'm glad you posted this. I think it is a great program for people who qualify. I have a friend whose payment went up by $500 a month! She has applied for a program through the military but I also told her about the FHA secure loan. How long does a person have to be discharged from a bankruptcy, in order for them to qualify through FHA?