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FHASecure
Frequently Asked Questions
for Homeowners
IMPORTANT DISCLAIMER
These FAQs have been modified to reflect that the term FHASecure
applies to all conventional to FHA refinance transactions. The previous edition of FAQs
indicated that only those borrowers who were delinquent due to reset of their non-FHA ARMs
were eligible for FHASecure, causing confusion.
How far behind can you be on a
mortgage to qualify? What about more than 90 days?
Must I be delinquent,
and for a certain period of time, in order to be eligible for FHASecure?
I have a fixed rate
mortgage and have fallen on bad times. What about me?
I have an interest-only
mortgage. Am I eligible for FHASecure?
Are there any programs
for people already in foreclosure?
Paying Off Your
Mortgage(S) And Your Home's Value
What if I have a
prepayment penalty and other refinancing costs and there isn't enough equity in my home
for me to refinance?
What if the average home
price is above the FHA loan limit for my area. Are the FHA loan limits changing for this
program?
Does it matter that the
value of my home is now less than what I still owe?
If I have first and
second mortgages can both loans be included in FHASecure?
How can FHA help homeowners
stay in their homes?
Why should I consider
refinancing into a FHA insured mortgage?
Is this program going to
help people who shouldn't have gotten a home loan in the first place?
If this program won't
help everyone, why is FHA making it available?
What is this program
going to cost taxpayers?
Does this program help
responsible people who pay their bills on time?
Why isn't FHA going
after the lenders who approved these types of loans in the first place?
Eligibility
How far behind can you be on a mortgage to qualify? What about
more than 90 days? - (Top)
There isn't a limit on how far behind you can be on your mortgage or how many payments
you've missed. Whether you're current, one month behind or multiple payments behind, the
amount you can refinance will depend on the value of your property and how much you owe
and if the lender, or another eligible source, is willing to take back a second mortgage
to help bridge the gap between what is owed and your home's value.
Must I be delinquent, and for a certain period of time, in
order to be eligible for FHASecure? - (Top)
No, and FHA encourages homeowners facing reset to refinance before they fall behind on
their mortgage.
I have a fixed rate mortgage and have fallen on bad times.
What about me? - (Top)
Homeowners facing financial difficulties and unable to make their mortgage payments are
strongly encouraged to contact their lender. Many lenders offer assistance to their
borrowers to help them bring their mortgage current. Homeowners may also want to contact a
HUD-approved housing counseling agency to find out about programs that may be able to
assist them, especially if communication with the lender has broken down. To find a
HUD-approved housing counseling agency, please call 1-800-569-4287 or search online.
I have an interest-only mortgage. Am I eligible for FHASecure?
- (Top)
So long as you are current on your mortgage, you are eligible for an FHASecure
refinance. If you are delinquent, the default must have been due to the payment shock of
an interest rate reset or, in the case of an Option ARM, the "recasting" of the
mortgage to fully amortizing.
Are there any programs for people already in foreclosure? - (Top)
It is possible that FHASecure may help homeowners already in foreclosure but
each situation is unique and depends upon the value of your home and how much you
owe, and if the lender is willing to offer a second mortgage. Homeowners facing
foreclosure are strongly encouraged to talk with their lenders, possibly with the
assistance of a HUD-approved housing counseling agency, to determine the best course of
action. To find a HUD-approved housing counseling agency, please call 1-800-569-4287 or
search online.
Paying Off Your Mortgage(S) and Your Home's Value
What if I have a prepayment penalty and other refinancing
costs and there isn't enough equity in my home for me to refinance? - (Top)
If you do not have sufficient equity in your home to add your prepayment penalty and/or
other refinancing costs into your new FHA mortgage, then you should ask your lender to
consider a second mortgage to pay the difference or a short payoff on your existing loan.
Offering either of these options is at the discretion of the lender.
What if the average home price is above the FHA loan limit for
my area? Are the FHA loan limits changing for this program? - (Top)
FHA's geographical loan limits and how much it can insure are established by law.
Although the FHA insured mortgage cannot exceed those loan limits, when a lender is
willing to combine a first and second mortgage, the amount of the second could exceed the
maximum loan limit for your area.
Does it matter that the value of my home is now less than what
I still owe? -(Top)
Not to FHA but the mortgage lender considering the refinance would have to be willing
to accept a short payoff on the existing loan OR to hold a second mortgage to make up the
difference needed to pay off the existing mortgage and the home's value.
If I have first and second mortgages can both loans be
included in FHASecure? -(Top)
Yes, but only if the combined amount is within the FHA geographical loan limit. If the
combined amount exceeds the FHA loan limit and/or the loan-to value limit, your lender
could offer you a second mortgage to make up the difference.
General
How can FHA help homeowners stay in their homes? - (Top)
FHASecure gives homeowners with non-FHA adjustable rate mortgages (ARMs),
current or delinquent and regardless of reset status, the ability to refinance into a FHA
insured mortgage. With FHASecure, the lender will not automatically disqualify
you because you are delinquent on your loan, and the lender may offer you a second
mortgage to make up the difference between the value of your property and what you owe,
including standard refinancing costs.
Why should I consider refinancing into a FHA insured mortgage?
-(Top)
FHA insured mortgages do not allow for prepayment penalties, teaser rates or balloon
payments. They are offered at market rate with terms up to 30 years and are fully
amortized, meaning that you pay towards principal and interest every month.
Is this program going to help people who shouldn't have gotten
a home loan in the first place? - (Top)
People will still have to qualify for a FHA insured mortgage, based on their capacity
to make the monthly mortgage payments. Unfortunately, those who shouldn't have gotten a
home loan in the first place will not be able to qualify for FHASecure or other
FHA refinancing options. They should contact their lender or a HUD-approved housing
counseling agency for assistance. To find a housing counseling agency, homeowners can call
1-800-569-4287 or visit www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm.
If this program won't help everyone, why is FHA making it
available? - (Top)
FHA recognizes that foreclosures and vacant properties affect home values, contribute
to neighborhood decline and cost local governments due to additional services and lost
revenues. FHA is offering this program to help prevent that type of negative impact on a
community.
What is this program going to cost taxpayers? -(Top)
Because the borrower pays the FHA mortgage insurance premium, taxpayers do not pay for FHASecure
or other FHA programs. FHA borrowers pay their own way, and potentially avoid foreclosures
that contribute to neighborhood decline, property depreciation and decreased revenues to
the locality.
Does this program help responsible people who pay their bills
on time? - (Top)
Any homeowner who is current on their mortgage can refinance to a FHA insured loan at
any time if it makes financial sense for them to do so. And for those homeowners with
non-FHA adjustable rate mortgages who are current but owe more than their home is worth,
it is now possible for them to refinance into a more affordable FHA insured mortgage and
the lender may execute a second mortgage at closing to pay the difference.
Why isn't FHA going after the lenders who approved these types
of loans in the first place? - (Top)
FHA was established to insure mortgages. It does not have the authority to regulate
transactions that do not involve FHA financing.
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100% home loans, no
down mortgage loans, zero down financing, no down payment, Down payment assistance,
countrywide,100%, 90% investment property, NOO, Online application, 100% owner
occupied primary residence mortgage loans, loanweb, ditech, pre-qualify,
lending tree, eloan, e-loan, quickenloans, quicken home loans, e-loan, 95-97% refinance,
refi, real estate, chase, ameriquest, lendingtree, jp morgan chase, h&r
block, bank loan, CA, AZ,CO, CT,HI,ID,IL, IA, KS, MA, MD, MN, MO, MS, NC, NE, NJ,
NM, NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, WA, VA, WI, FNMA, Fannie Mae,
FreddieMac, FHA, VA, FHA Secure
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