I have been answering a number of questions regarding President Bush’s expansion of the FHA loan program with FHA Secure. I’ve decided to consolidate these questions into an FHA Frequently Asked Questions (FAQ) that will be updated frequently as the program develops.
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that can save you thousands of dollars on your next home loan.
Who is FHASecure Intended to Help?
There are currently just over two million American homeowners with Adjustable Rate Mortgages scheduled to reset over the next four years. The Federal Housing Administration estimates that that this program could help 240,000 homeowners refinance their mortgage loans. If your mortgage is scheduled to reset and you will no longer be able to afford the payments, FHASecure could help you refinance with a government insured, conventional mortgage loan.
How soon can I apply for FHASecure mortgage refinancing?
The Federal Housing Administration began accepting applications on September 5th, 2007 and the program will run through December 31st of 2008.
Do my payments have to be current before I apply?
In order to qualify for FHASecure mortgage refinancing you must pay your mortgage payments on time for six months prior to your Adjustable Rate Mortgage’s scheduled rest. This is not the only requirement, you must be employed and have sufficient income and work history to qualify. FHASecure will charge you a mortgage insurance premium amount based on your credit rating once you’re approved.
What are the requirements for FHASecure mortgage refinancing?
The basic requirements are that you have a non FHA mortgage that has already reset or is scheduled to be reset. You must show that prior to the reset you were making your mortgage payments on time for at least six-months prior to your loan’s reset. There are provisions for homeowners who have missed payments or have poor credit if they have built up enough equity in their homes to qualify. “Reset” means that your lender will be adjusting your mortgage rate and raising your mortgage payment.
Can interest-only and option Adjustable Rate Mortgages be refinanced under FHASecure?
Yes, any Adjustable Rate Mortgage as long as it is not an FHA insured loan can be refinanced with FHASecure. Fixed rate mortgages are currently not eligible for the program but could be added at a later date.
If I’m not behind on my payments can I still refinance with FHASecure?
FHASecure is intended for homeowners that are behind on their mortgage payments because of a scheduled interest rate adjustment on their loans. If you’re not behind on your mortgage payment you could still benefit from a standard FHA mortgage which could get you a lower mortgage interest rate.
What is the maximum I can borrow with an FHASecure loan?
The amount borrowed cannot exceed the conforming loan limits set by Fannie Mae. In 2007 this amount is $417,000.
Can I take out an interest only or option Adjustable Rate Mortgage with an FHASecure Loan?
No. The FHA will not insure interest only or payment option Adjustable Rate Mortgages..and they probably never will due to the risks associated with these Adjsutable Rate Mortgages.
What are FHASecure Mortgage Insurance premiums?
When you take out an FHASecure mortgage loan you will be charged a monthly mortgage insurance premium. This mortgage insurance reduces the risk for the Federal Housing Administration allowing the agency to cover homeowners with poor credit. The amount you pay for your mortgage insurance premium depends on your credit. Homeowners with poor credit will pay more than homeowners with good credit.
If you would like to read more refinancing advice, please register for our free mortgage refinancing blueprint.