GA Mortgages: FHA Refinancing During The Mortgage Crisis
You cannot turn on the news without seeing a new headline trumpeting the meltdown of the mortgage industry. Obtaining a conventional mortgage is becoming more difficult by the minute. Qualification guidelines are arguably tighter than they have ever been.
This financial meltdown is happening in the middle of a time period when record numbers of adjustable rate mortgages are scheduled for rate increases. Adjustable rate mortgages generally started out with low teaser rates which means that no matter what rates the Federal Reserve cuts, these mortgage rates are going up. This initial adjustment is normally less limited than later adjustments. It is fairly common now to see mortgages which had starting rates in the low 5 percent range jumping up 8, 8.5 or 9! Subprime loan rates can be moving even higher. Borrowers who are not ready for these changes will end up as part of those foreclosure statistics on the nightly news.
If you do not fit into the new tighter conventional 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 $346,250 in more populated Georgia counties and $271,050 in more rural Georgia counties. That solution is to use an FHA loan.
FHA loan guidelines allow refinancing with higher debt ratios. They allow you to qualify for a new mortgage even with past credit problems so long as you can provide a good explanation and you have solved the problem, or if a new mortgage will solve the problem. FHA loans can also take up as much as 97% of the value of your home if necessary.
If you live in Georgia and your current mortgage is an adjustable rate mortgage with an imminent rate increase, don’t give up. Contact a Georgia HUD approved FHA lender and find out if the FHA option is available in your situation. You will certainly be glad you did.
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