An Fha Loan Might be your Best Option

SugarMortgage.com: If you obtained a high risk subprime loan with the intentions of refinancing later, then you might be one of many homeowners suffering from the inability to refinance. Not many people predicted a decline in real estate values, the astonishing amount of foreclosures, the new conservative lending guidelines and/or the disappearance of many major US Lenders. But these factors have made it virtually impossible for many homeowners to refinance out of their subprime loan.

But there still may be hope, thanks to the Federal Housing Administration (FHA). FHA is the largest insurer of mortgages in the world, insuring over 34 million properties since 1934. Below are some attractive features of an FHA loan...

- Very low fixed interest rates

- No prepayment penalty

- No credit score requirements

- Only need to be 2 years out of a Ch.7 bankruptcy (or less in unique situations)

- Can be approved while in a Ch.13 bankruptcy

- More liberal lending guidelines than a traditional conforming loan

- Borrow up-to 97.75% of your homes appraised value (or sales price on a purchase)

- In many cases you can keep a second mortgage, even if you are over 100% of your appraised value

- FHA gives you the option to explain credit problems

- Allows a non-occupying co-borrower

- Allows money (if any) due at closing to come from a gift

And recently FHA rolled out their newest program - FHASecure. FHASecure is a refinancing option that gives credit-worthy homeowners, who were making timely mortgage payments before their loans reset but are now in default, a second chance with a FHA insured loan product.

By refinancing into a FHA insured mortgage, you can expect to pay lower monthly mortgage payments. FHASecure can improve the quality of life for many communities by helping to reduce the number of mortgage defaults and bringing greater stability to local housing markets.

Not all Lenders are approved to offer FHA loans. This means in many situations a loan applicant may not even realize FHA is an option because the lender they are working with does not offer it. In addition, one Lender may decline your FHA loan application and another Lender may approve it, even though Lenders use the same guidelines. This is because when applying for an FHA loan you can explain why you may have had some credit issues either currently or in the past. One lender may feel it is a good reason and another may feel its not.

If you feel an FHA option may be for you, then click here to view FHA approved lenders in your area.

Resources:

http://www.fha.gov

http://www.fha.gov/about/index.cfm