GA Bad Credit Mortgages – Refinancing Using FHA During the Subprime Mo…
Every morning and several times during the day there is a new headline trumpeting the meltdown of the mortgage industry. Obtaining a traditional mortgage is becoming more difficult by the minute. Qualification guidelines are tighter than they have been in years.
This meltdown is occurring at the same time a record number of adjustable rate mortgages are set to begin their rate adjustments. Because these ARMs usually had initial teaser rates that were artificially low, if you have an adjustable rate mortgage there is a near 100% chance that your rate will be going up. Most of the time, this first rate adjustment will be several percentage points. It is not uncommon right now for a mortgage that has had an interest rate in the low 5’s to be adjusting up to the 8 or 8.5 percent range! If you have a subprime loan, this increase may be from 6.5 percent to 9.5 percent or more! Borrowers who are unprepared for this will have their mortgage end up as part of the delinquency rate statistics talked about on the evening news.
If you do not fit into the new tighter traditional mortgage guidelines because of credit problems or because your home’s value has not risen as quickly as you planned, there may be a very good option if your loan amount is below $252,890 in more populated Georgia counties and $200,160 in more rural Georgia counties. That solution is to use an FHA loan.
FHA loans allow you to refinance with higher ratios of debt in relationship to your total income. FHA loans allow you to get a mortgage already with credit problems as long as you have a good explanation and the problems have been solved or the new mortgage will help solve them. FHA loans also allow a loan amount that is as high as 97% of the value of your home if necessary.
Don’t just give up if you currently have an adjustable rate mortgage and you know the payment is about to go up. Call a HUD approved FHA lender to find out if this very good option is open in your situation. You may be very glad you did.