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If I Have Bad Credit Can I Refinance My Mortgage With an FHA Loan?
By Francine L. HuffMortgage Credit Problems Columnist
About 2 million
adjustable-rate mortgages (ARMs) are expected to reset in 2007, pressuring
homeowners to come up with more cash for their monthly home loan payments,
according to NPR. Rising payments have led a record number of homeowners to
file for foreclosure, particularly in California, Nevada, Arizona, and Florida.
As a result, the Federal Housing Administration has launched the FHASecure refinancing
program to help homeowners keep their homes.
Who Can Qualify?
Were you mostly current with your mortgage loan payments
before your ARM reset? If so, you may qualify for FHASecure. This refinancing
program can allow you to have a second chance to keep your home if you have
enough income to make the new mortgage payment. To qualify you must be
delinquent on payments for a non-FHA insured ARM that has already reset.
Why Refinance to an FHA
Mortgage?
Refinancing with an FHA fixed-rate mortgage can allow you to
have stable monthly payments for the life of your home loan. You'll also
receive a competitive interest rate on your loan. Even people with bad credit
may qualify to refinance their mortgage with an FHA-backed loan. FHA doesn't
rely on credit scores. The underwriters consider the entire picture and
mitigating circumstances when applicable. Finally, homeowners who lost equity
in a negative amortization loan may still have enough equity to refinance into
an FHA. The loan-to-value guidelines are much more liberal than for
conventional loans.
If your adjustable rate mortgage has reset and you're having
trouble keeping up with your payments, a refinance could help you get back on
track with your finances. Look for a lender who is approved by the FHA at www.fha.gov. Also seek credit counseling if you
need help putting together a budget or debt consolidation plan.
Sources:
Federal
Housing Administration
NPR
About the Author
Francine L. Huff is a
freelance journalist and the author of The
25-Day Money Makeover for Women. She
has appeared on a variety of TV and radio shows.
About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.
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