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by: GregLietz
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With the recent raise in mortgage rates and the price of gas affecting all aspects of the economy, many people are finding themselves in trouble financially. In fact, more and more people are finding themselves on the fast track to foreclosure on their home. Especially those who have adjustable-rate mortgages are suffering when it comes to making mortgage payments on time. However, even in these tight times there are some new options available for those struggling to avoid foreclosure and one new option is the FHA secure loan.

In October 2007, President Bush announced that a new loan, the FHA Secure Refinance Loan, would be offered. This loan is designed to help homeowners in danger of defaulting on payments or facing foreclosure to avoid just that. This new product, FHASecure, is meant to help people suddenly facing higher mortgage payments they may not be able to meet. FHASecure does require escrow for both taxes and insurance, and provides much-needed assistance for people who wish to avoid foreclosing.

FHA Secure Loan Benefits

There are a variety of excellent benefits that are now being offered with this new FHA Secure Loan. The following are just a few benefits homeowners can enjoy with the FHA Secure Refinance Mortgage:

Benefit #1 - Prevention of Foreclosure - One of the most important benefits homeowners can reap with an FHA Secure Loan is the ability to prevent foreclosure. The thought of losing your home after many years of making your mortgage repayments on time is devastating but it does not have to be this way and help is at hand for people with a good payment history.

Benefit #2 - No Prepayment Penalties - Another great benefit of the FHA Secure loan for homeowners is that it comes with no prepayment penalties. While there are other mortgages offered that do include penalties for prepayment, this loan will not be one of them. The FHA realizes that the last thing people need is to have more penalties added on to them, so they will never penalize homeowners for paying off their mortgage early.

Benefit #3 - Save Your Credit - Having to foreclose on your home can leave your credit in disaster. Going through a foreclosure can cause you more problems in the future. It can make it difficult to get a new credit card, to purchase another home, and even to rent an apartment to live in. However, with a FHA Secure Refinance Loan you can avoid foreclosure and save your credit.

Do You Qualify for a FHA Secure Loan? Necessary Criteria

The FHA Secure Loan is not something every homeowner can qualify for. To do so, you have to meet the following five criteria:

1. You must have a previous history of paying your mortgage payments on time. In this case, your previous history applies to the time before your previous rates expired and your loan reset.

2. A history of sustained employment showing you can meet the requirements to pay off the new loan is necessary.

3. Homeowners must also be able to prove that you make enough income to pay the new mortgage payment each month on time.

4. You must have at least 3% of the cash needed or the equity in the home in order to qualify for the FHA Secure loan.

5. Last of all, the homeowner must also be able to prove that their interest rates have been reset after June of 2005, or that they will be reset before December of 2009 in order to qualify for this new loan.

At the end of the day, the FHA Secure Loan is going to provide a much needed break for families who have been good borrowers in the past, but who are having problems now repaying their mortgage. The new FHA Secure is definitely going to help bring more liquidity to a mortgage market that has been suffering in the past year. It is also anticipated that in the near future, there will be other lenders offering these types of loans that are insured by the FHA as well. So, for those who are finding themselves on the brink of foreclosure, the FHA Secure Loan is definitely a lifesaver that may save the day, and a home.

About the Author

Mortgage help from Home Mortgage Financing.com. Go to the site Home Mortgage Financing.com to learn about or watch videos about mortgage loans like the FHA Secure Loan.

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