Avoid Foreclosure With The Fha Secure Loan

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 - The Benefits

There are a variety of excellent benefits that are now being offered with this new FHA Secure Loan. The following are just a few benefits homeowners can enjoy with the FHA Secure Refinance Mortgage:

Benefit #1 - Foreclosure Prevention - One of the main benefits that homeowners will enjoy with FHA Secure is the ability to prevent foreclosure. After spending years paying on time for their home, it is devastating to even think of losing your home. Those who do have good payment histories in the past can find help with the new FHASecure.

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 - Keep Your Good Credit - Of course, if you have to foreclose on your home, it can mean major damage to an otherwise good credit report. It can also create problems that you will carry with you into the future. You might have difficulty purchasing another home, getting a credit card, or even renting an apartment. However, the FHA Secure Refinance Loan helps you avoid just this type of situation by letting you sidestep foreclosure and keep your good credit.

FHA Secure Loan - Criteria To Be Met

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. A history of sustained employment showing you can meet the requirements to pay off the new loan is necessary.

3. You must also be able to prove not only that you are in employment but that you actually earn enough money each month to meet the new loan payments.

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.

When all is said and done, the FHA Secure Loan will be able to provide much-needed relief for those who have been responsible homeowners and mortgage payers in the past and whose problems stem from the current market conditions and such vagaries as the adjustable-rate mortgage. FHASecure will likely bring more liquidity to a mortgage market that has struggled mightily within the past year. In the near future, it is also likely that other lenders will offer similar loans. Therefore, if you are in danger of foreclosure, the FHA Secure Loan may just save your home and allow you to reestablish a secure foundation once again.