Refinancing a Mortgage With an FHA Secure Home Loan

An FHA home loan mortgage can help you avoid foreclosure if you are facing high interest rates on your mortgage. After the housing bubble burst in 2007, then President Bush established the FHA Secure Home Loan to help victims of bad mortgages refinance and save their homes. Refinancing is essentially paying off your current mortgage with a new loan. In this case, you would be paying off your private loan with a loan from a federal agency. There are many benefits if you qualify.

Benefits of Refinancing with an FHA Secure Home Loan

  1. Avoid foreclosure: If you are facing foreclosure because you can no longer make mortgage payments, refinancing is a great option. You will immediately lower your monthly payments and save more over the life of the loan.
  2. Save your credit score: Foreclosures can make you ineligible for a new mortgage for some time. Protecting your credit score against this black mark is essential for your financial future.
  3. Avoid penalties for paying off your mortgage early: You will have to pay penalties in most refinance options. With an FHA loan, if you pay off your mortgage before it matures, you will not face penalties.

Qualifications for Securing an FHA Secure Home Loan

  1. You must show your interest rates have reset since 2005 or will reset prior to December of 2009. This program is meant for people who are in a bad position because of an adjustable rate mortgage. If you cannot afford a mortgage has not and will not reset, then you will not qualify.
  2. You must be able to provide at least 3% of the total amount of the new FHA Secure Home Loan in either cash or equity. If do not have any assets or cash to supply, you will not be able to get the loan and refinance your current mortgage.
  3. Consistent employment is required. You will not be able to get the loan if you have lost your job and cannot afford your mortgage for this reason. Again, these loans are meant to save those people who are hurt by adjustable or sub-prime mortgages, not those who are suffering from other types of financial problems.
  4. Your income must be high enough to make the monthly payments. You will likely need to show you have increased your income over the past few years. Being consistently employed, preferably by the same employer, is a sign of good faith.
  5. You must be able to show a good history of making payments before your home mortgage rate reset. The FHA is looking to make sure you are credit-worthy despite your current situation. A good credit history is the best way to show you are credit-worthy.