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To Avoid Possible Foreclosure, Use The Fha Secure Loan

Jan 5, 2008
Since the housing bubble has burst and the economy is at risk for a variety of factors, many people are finding themselves in trouble. Many of these people got mortgages that were adjustable-rate mortgages, for example. With rate increases becoming more and more common, these folks now cannot make mortgage payments on time or in full. However, even for someone in this situation, there's a new option, called the FHA Secure Loan.

At the end of October 2007, President Bush was the one to announce that a new FHA Secure Refinance Loan would be launched. It was designed to help homeowners avoid delinquent payments and even foreclosure. When it comes to the new FHASecure product that is now available, basically it is a refinancing product designed to help people who are suffering from higher mortgage payments. This new product requires escrow for both insurance and taxes and will offer excellent assistance for people trying to avoid foreclosure.

FHA Secure Loan Benefits

There are several benefits on offer with the FHA Secure Loan, and details of just a few of these are listed below.

Benefit #1 - Prevention of Foreclosure - This is perhaps the main benefit homeowners can expect with the FHA Secure Loan. Instead of facing foreclosure because of current economic events beyond your control, if you have a good payment history in the past, FHASecure can help you keep your home.

Benefit #2 - No Prepayment Penalties - FHASecure also offers homeowners the benefit of no prepayment penalties. Of course, other mortgages are offered that do include prepayment penalties, but this is not one of them. Because the FHA is fully aware that people are already struggling to make payments, penalties will be avoided so that homeowners can not only skip this particular hardship, but they are also assured they will not be penalized for paying off their mortgages early.

Benefit #3 - Your Credit is Safe - Foreclosing on your home can lead to all kinds of future problems in connection with your credit rating. With the FHA Secure Loan you can rescue your credit when you avoid foreclosure so there should be no difficulties when you apply for a new credit card, or any kind of personal finance at a later date.

Do You Qualify for a FHA Secure Loan? Necessary Criteria

The FHA Secure Loan is not something every homeowner can qualify for. To do so, you have to meet the following five criteria:

1. You must have a previous history of paying your mortgage payments on time. In this case, your previous history applies to the time before your previous rates expired and your loan reset.

2. To qualify for the FHA Secure loan, you must also have a history of sustained employment as well, to make sure that you can actually pay off this new loan.

3. Homeowners must also be able to prove that you make enough income to pay the new mortgage payment each month on time.

4. At least 3% of the loan amount either in cash or equity in the property has to be provided by the applicant.

5. Finally, you must be able to prove that your interest rates were reset after June 2005 or that they will be reset before June 2009, if you wish to qualify.

The FHA Secure Loan aims to provide a much needed break for borrowers who have been good business for lenders in the past, but due to rates changing, are having problems repaying their mortgage at the present time. The new FHA Secure Loan will inject liquidity into a mortgage market which has been struggling over the past twelve months and similar products insured by the FHA from other lenders are likely to appear on the market in the near future. So, for those finding themselves on the verge of foreclosure, the FHA Secure Loan is the lifeline they have been desperately looking for to save the day, as well as saving their home.
About the Author
Mortgage help from the mortgage information website Home Mortgage Financing.com. Visit Home Mortgage Financing.com to read or watch videos about a loan like an
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