FHA Mortgage Relief | FHA Rates, FHA Refinancing & FHA Home Loan News

FHA Loans for Bad Credit

05.02.11

Many people find themselves in the unfortunate situation of having bad credit. Whether it was because of past financial difficulties or just plain money mismanagement, these days you can still qualify for a home loan even if you have less than perfect credit. Home loans for bad credit do exist. The sad truth, however, is that you are going to pay more for your home loan than someone with good credit. To mitigate their risk, banks will charge you a higher interest rate depending on your credit score. The nice thing, though, is that you can always refinance down the road when your credit has improved. If not bad credit refinancing may still present monthly savings as FHA and VA continue to make exceptions for people with less than perfect credit.

FHA Offers Home Loans with Bad Credit

The FHA is a good place to turn to for home loans for bad credit. Even if you have a foreclosure on your record, you could qualify for a low interest home loan in as little as two year after the foreclosure took place. If you have declared bankruptcy, most banks will begin offering decent rates on home loans about four years after the discharge. However some will not recommend a FHA home loan because in as little as six months after your bankruptcy but you may be required to put down a larger down payment (up to 35% of the amount borrowed). Subprime mortgages specialize in lending to people with very risky credit. However, interest rates are generally very high with these lenders.

Get a Home Loan with Bad Credit

Getting approved for a home loan with bad credit takes some preparation and work. The first step would be to try and improve your credit, particularly if you have declared bankruptcy. Get a major credit card and begin using it judiciously. Make your payments on time every month to establish a good payment history. The longer you can do this before applying for a loan the better your credit will look. Make sure all three of your credit reports are accurate. Even minor misreported information can have a major negative effect on your credit.

Loans for People with Poor Credit! Home Buying with Bad Credit

FHA Loan Rates have fallen below 4% on fixed rate mortgages!

Banks that provide home loans for bad credit are most interested in your ability to pay the loan off. Therefore, you will need to establish steady employment for a minimum of two years. It is a good idea to use a mortgage calculator to determine what your mortgage payment is going to be every month and ensure that number is no more than 30% of your monthly income. Lastly, save at least 10-20% for the down payment on the home. The bigger your initial investment the more comfortable banks will be with lending you money. Additionally, a bigger down payment can also trim a few points off your interest rate.

Mortgage Relief with Emergency Homeowner Loans

04.01.11

Refinancing has been a struggle for many homeowners since the housing crisis so many people are interested in the Emergency Homeowners Loan Program that is a federally funded initiative to help distressed homeowners. The Obama administration continues to promote mortgage relief for distressed homeowners with the HARP, EHLP, HAMP, and FHA short refinance loans. While beginning initiatives provided some assistance to individuals and families in need, many people did not qualify for the conditions to save their homes. With banks and loan companies tightening loan guidelines, getting approved for a mortgage refinance has become significantly more challenging.

Emergency Homeowners Loan Program Guidelines –

The Emergency Homeowners Loan Program guidelines have extended the reach of these programs to have a greater impact upon those that are still struggling with current economic conditions. Government mortgage policies assist borrowers that have underwater loan issues. Most of these eligible borrowers have endured a hardship recently that has affected their ability to make loan payments. The Emergency Homeowner Program provides mortgage relief for anyone experiencing long term unemployment. These additional efforts are targeted toward the areas of the country experiencing the most difficulty. The Emergency Homeowner Loan offers additional money that is meant to lower the number of homes that will go into foreclosure proceedings.

Get Mortgage Help When It’s Needed

The major of advantage of the program is the ability to receive no equity refinancing. This is particularly useful for those who had just purchased their homes before the mortgage crisis hit. For these new property owners, the added expense quickly saw their total costs associated with the house skyrocket. Emergency Homeowners Loan Program guidelines state that regardless of how much is owed on the property, successful applicants can receive up to 125% of the value of the loan. This is truly amazing because 125 loans have all but disappeared and they are needed now more than ever. This measure was enacted to prevent their personal ship from sinking in the sea of individuals losing their homes.

The Emergency Homeowners Loan Program can provide a total of 2 years of assistance to delay the risk of facing losing their homes. The major objective is to keep monthly payments affordable so that people that are struggling to find new employment opportunities can continue to look for work. Emergency Homeowners Loan Program guidelines provide funds for the mortgage as well as tax payments and adequate insurance coverage. It is meant to bridge the gap until more stable financial ground can be realized by the household. This will allow available funds for other areas that are critical to maintain survival in today’s society.

Emergency Homeowners Loan guidelines state that the household must have had an income level similar to other families in their neighborhood. Current income must also have experienced a decrease in the amount of at least 15% before any layoffs or job losses occurred. EHLP will take effect once the titleholders have missed 3 monthly payments or have received notice that foreclosure is eminent. While the federal government has oversight on the programs, each state can allocate the funds in the manner they see fit to provide the most assistance. For someone experiencing stress due to these conditions, applying for this program today can head off major consequences.

FHA Short Refinance Loan Update

09.01.10

In a few days, the government will be launch the latest mortgage relief effort with the FHA short refinance program targeting homeowners who are struggling with an underwater mortgage. The FHA short refinance program has also been called the Emergency Homeowner Loan Program. The only catch for eligible homeowners is that they must have a stellar record of timely mortgage payments before qualifying for FHA refinancing under this program.

Take advantage of Refinancing Underwater Mortgages with the FHA Short Refi Program

The FHA Short Refinance loan was created to assist distressed but responsible homeowners who owe more on their home loan than their house is worth because their local markets saw significant declines in property values. The FHA short refinance program will kick off on September 7^th. FHA rates remain at record lows, so this should be a very popular loan program as approximately 35% of homeowners in the U.S. are said to have an underwater mortgage.

FHA will offer this mortgage relief opportunity to specific non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least 10 % of the unpaid balance of the first mortgage. The new mortgages would then be FHA-insured. The borrower must have a credit score of at least 500 and the house must be the homeowner’s primary residence.

To be eligible for FHA’s Short Refinance program, a homeowner must meet the following criteria:

• Borrower must have a mortgage underwater (negative equity as mortgage is greater than property value)

• Homeowners must be current on their mortgage

• Borrower must live in their home (primary residence)

• Borrower must have a minimum 500 credit score

• Homeowner must have an existing non-FHA loan

• Existing mortgage lender must write down at least 10% of the unpaid balance

• Refinance the new FHA mortgage to a loan-to-value ratio of no more than 97.75 %.

In addition, the first mortgage being refinanced must have a maximum loan-to-value of 97.75 %. Some FHA lenders are exciting with the government’s aggressive approach to help homeowners find a solution for refinancing underwater mortgage loans. Banks are more willing to negotiate with borrowers who delinquent on their first or second mortgage. Many FHA lenders will not consider writing down loan balances or extending loan modifications unless homeowner can demonstrate that they can afford their home. FHA Commissioner David Stevens said the government is “throwing a lifeline” to families, giving homeowners and lenders another tool to battle the problem of negative equity facing borrowers current on their mortgage.

FHA Loan Modification vs FHA Refinance Guidelines

07.23.10

Many homeowners with FHA mortgages are experiencing hardships and getting approved for an FHA loan modification can be a wise financial move if qualifying for refinance loan has already been ruled out. 2010 FHA loan guidelines have tightened; so many borrowers simply don’t meet the requirements for a FHA loan qualification along the traditional refinance route. Fortunately, many FHA lenders are extending FHA mortgage relief with loan work-outs, forbearances and FHA modification options. Like a mortgage refinance, the goal of a FHA loan modification is to save money with a lower monthly payment. In order to lower the monthly payments, lenders are lowering the FHA rates or extending the terms. In some regions in where home values have plummeted, borrowers have been successful achieving a principal reduction. Getting a FHA loan modification approved is much more common than a principal reduction, so don’t hold your breath for your FHA loan company to lower your mortgage balance even if you home loan is underwater.

Qualifying for a FHA Loan Modification

As you may already know, qualifying for a FHA modification plan is different than a FHA refinance qualification. FHA refinance guidelines allow borrowers to qualify for a rate an term refinance with a debt to income ratio up to 45% in most cases. (Max DTI ranges 36% – 45% for FHA refinancing) Whereas the debt-to-income ratio on a FHA loan modification seems to be between 70 and 100%. Some lenders will lower the payment automatically to a 38% debt to income ratio, so for some borrowers their mortgage payment is reduced significantly.

FHA Refinance Guidelines Limit LTV to 96.5%

The loan to value requirements are much different as well. FHA refinance guidelines enable borrowers to refinance up to 85% on cash out loans and 96.5% on rate and term refinancing. The FHA loan modification agreements seem to be extended to borrowers who are underwater with loan to value levels that exceed 100%. (ie. borrowers owes $350,000 on mortgage but home is valued at $300,000).

The other important underwriting issue with FHA home refinancing is payment history. FHA refinance guidelines typically require no late payments on the mortgage for the last 12 months. However, on a case by case basis, underwriters may approve a borrower for FHA refinancing with one 30-day late payment if they have compensating factors. The FHA loan modification is usually approved to borrowers who are 30-days late or more. It’s tricky because if you asked the lenders if being late on the mortgage was required for a FHA modification approval they would say “No.” However, we see a pattern of FHA loan modification agreements being extended to distressed borrowers who are behind on their mortgage payments.

Both refinance and loan modification solutions continue to help millions of borrowers across the country achieve FHA mortgage relief. If you are experiencing some financial hardships that are making it difficult for you to afford your mortgage payment, it is strongly recommended that you seeking financial consultation and move forward with one of these loan relief solutions.