If you are a homeowner with an adjustable rate mortgage that you soon will not be able to afford and are considering government help, there are several things you need to know about these loans. The program you should consider for mortgage government help is known as FHASecure. Here are the facts you need to know about FHASecure mortgage refinancing.
FHASecure helps homeowners that have non FHA insured mortgage loans. You can qualify for refinancing even if you are behind on your payments, even if the lender has not yet reset your mortgage rate. You’ll still have to qualify based on your ability to make the monthly payments, meaning your income will be a large factor for approval. If you qualify for FHASecure refinancing you’ll be required to purchase Private Mortgage Insurance which will raise your monthly payment amount with the premiums. Because the borrower foots the bill for this mortgage insurance there is no cost to the government for FHASecure programs.
This program applies to homeowners with Adjustable Rate Mortgages. If you have a fixed rate mortgage loan you will not be able to participate until the program is expanded. Under FHASecure you can refinance up to 97% of your home’s value with a government insured mortgage loan. Because your loan is insured by the government you should qualify for a lower mortgage rate meaning that your monthly payment could go down to a manageable level.
Here are the basic program requirements for refinancing your Adjustable Rate Mortgage Loan.
Is there a limit to how far behind I can be on my payments to qualify?
The FHA does not set a limit to how many months behind you can be in order to qualify for FHASecure refinancing. The amount you will be eligible depends on the value of your home and what you owe on your existing mortgage. Being behind on your mortgage payments is not a requirement for this program.
I have a fixed rate mortgage loan, can I qualify?
If you are falling behind on your fixed rate mortgage loan you should contact your existing mortgage lender regarding a forbearance to help get you caught up on your payments. At this time FHASecure mortgage refinancing is not available to homeowners with fixed rate loans.
What about interest-only and option mortgage loans?
As long as your monthly payments are current in this case you can qualify; however, there are exceptions. If you are behind because you can no longer afford your payment after an interest rate adjustment or recast of your loan, FHASecure refinancing could be for you.
What if my home is worth less than I owe on my existing mortgage?
Having insufficient equity will not disqualify you automatically; however, you may need to find a lender willing to grant you a second mortgage to make up the difference before refinancing. Another option is a short payoff on your existing mortgage loan. If you already have first and second mortgage loans on your home these both can be included as long as you don’t exceed loan-to-value limits set by the FHA.