Who can be helped by a FHA refinance?
By admin | May 8, 2007
So you are locked into a sub-prime loan and think the FHA can help you out. Well the FHA wants you know exactly who can be helped out by a FHA Refinance and who can’t.
Here is a list of the qualifications to those that can be helped out by the FHA:
1. Can afford payments on a fixed-rate loan at a market rate of interest, with FHA insurance premiums
2. Have a property with sufficient equity to qualify for FHA financing
3. Can meet other standard underwriting criteria that balance the overall risk of the mortgage; and
4. Are owner-occupiers
What hurts for most of the individuals with a sub-prime loan is the fact they actually owe more than the house is worth. Financially “upside down” can be a result of not being able to make the increased monthly payments when the mortgage interest resets or the value of the home depreciates in value.
Here is the list of individuals that can’t be helped by the FHA:
1. Took out sub-prime loans because of an inability to document income and assets
2. Are involved in speculative investments
3. Have accumulated other debts that make it impossible to sustain their current property with a new fixed-rate loan with current income, or who lack sufficient positive equity in their homes.
Be sure to check out all of your options when deciding whether to refinance your current loan.
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