FHA secure loans were introduced as a way for homeowners with non-FHA adjustable rate mortgage to refinance even if they are delinquent in their monthly mortgage payments. The Federal Housing Association, which, in conjunction with the US Department of Housing and Urban Development (HUD), insures FHA mortgages wanted to provide a way for those homeowners who are in trouble to refinance into a safe and affordable financing option. With this refinancing option from the FHA, lenders may not automatically disqualify you from refinancing just because you are delinquent on you mortgage. Additionally, the lender may offer you a second mortgage should you FHA refinance loan not cover the total outstanding mortgage balance.
FHA does not provide a loan, but rather insure the home loans made by approved FHA lenders. If you should default on, or fail to pay, your monthly mortgage payments, your lender will still be paid from an insurance fund. This insurance on the loan allows lenders to work with individuals with less than perfect credit.
As with most kinds of loans, FHA secure loans have advantages and drawbacks. The most obvious benefit is that you can refinance out of the adjustable rate mortgage you currently have and into a low fixed rate mortgage. A point you should be aware of is that the maximum amount you can take a loan out for is different depending on what county you live in within the United States and typically less than you would be able to get with a conventional loan. This really only makes sense, however, because FHA loans were intended for first-time homebuyers and homeowners with lower income that are not typically able to afford a large down payment.
Most FHA secure loans require you to be current on you mortgage and have the income to be able to pay the monthly mortgage payment to qualify. While the loan is designed to suit people with lower incomes, there is no income limit to apply and be accepted. There are still qualifying ratios for the amount of money you can get, however. You can find out if you qualify for a FHA loan in a very short amount of time. Gone are the days when it took 30 to 45 days to discover if your mortgage application had been accepted. With advances in communication and technology, you can find out if you qualify within minutes. If you are interested in considering this kind of loan, visit one of the many quality mortgage sites online today so that you can be put in touch with a qualified FHA lender fast.
Kevin Benner is the owner of 4mortgageratequotes.com an online financial information site helping consumers find low rate refinance mortgage quotes as well as other mortgage refinance and debt consolidation issues.
