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Refinance Fha Mortgage - The Recent Changes to Your Options to Refinance FHA Mortgage

homeowners help lender payments

Many homeowners throughout the United States are experiencing a lot of difficulty in today’s economy. Their struggles have escalated to a point that many homes have ended up in foreclosure. In fact, the highest number of foreclosures have been recorded in the last two years and it has been decades since the real estate market has experienced such hardships. However, before you consider any other solution to your problem, consider the advantages of refinance FHA mortgage to help you through your own difficulties.

Recently, the options for homeowners to refinance FHA mortgage have changed. The government has put into place the FHA’s Short Refinance Program. Helping those homeowners who are paying mortgages on homes that are no longer valued at what is owed, the program does require one to be current on their existing payments and have a non-FHA loan. While it will not help those who are currently behind on payments, it is one more step in the foreclosure prevention process a homeowner can take.

The main benefit to this program is that the existing lender will actually write-off 10% of your existing mortgage. Unfortunately, the lender does not have to agree to this and may hold up the refinance FHA mortgage. Truthfully, as they are not going to receive any type of incentive from the government to do this, not many may be willing to let go of that 10%. As many homeowners find themselves owing about 30% more than what their home is valued at, it may not be an option for everyone.

However, should one find that this type of refinance FHA mortgage could help them, they should contact their lender to inquire whether they qualify or not. Those with a second mortgage on their home should be the first one’s to inquire, as it can help them greatly. As stated above, there is no incentive for lenders, but there is an incentive for the lenders of secondary-mortgages. Should the secondary-lender agree to lower the balance of the loan, they will receive a $500 incentive from the government.

If there is no incentive for the primary-lenders, homeowners may feel the program is not even worth applying for, as they do not think their lender would ever reduce their balance by 10%. Homeowners must consider the alternative. When a homeowner is having difficulty paying the current payment, it can put them at risk for foreclosure. Lenders usually lose a great amount of money on foreclosed homes and they never recover the money. By opting to lower the balance by 10%, the lender can actually save themselves money in the end.

Whether you are having difficulty keeping up with your current payments and your home is valued at above what you owe on it, consider a refinance FHA mortgage. There are now programs available to help get homeowners out of their financial situations. Just remember, staying current on your payments will help you to qualify for this new program, so be sure that all your payments are made on time.

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