In recent weeks, I have heard a lot of people talk about the mortgage industry and how they can or can’t get a home loan. There are a number of options out there for you.  Here is some key advice to consider.

You’ve Got Great Credit

Do you have a good credit score (700 or above) and have a sizable amount of money to put down as a down payment?  You will need at least 20 percent, for example, to qualify for these loans.

In this situation, you have what you need to make it big.  Most traditional mortgage lenders are quite stable and able to provide you with the loan you need. The good news is you will not pay much for it. Interest rates are very low, with good credit, you may see interest rates as low as 5 percent in the next few months for well qualified borrowers.

You Don’t Have Great Credit

On the flip side, you also need to consider those who do not have a great credit score. If you want to buy a home, then you still have options. Here’s some advice.

If you have at least 3 percent to put down on the home and you have a credit score at or above 580, then you should consider FHA loans.  The FHA provides you with a range of opportunities including refinances of the current loans you have.

If you do not have these qualifications, I advise you to wait and get to that point. Subprime loans are highly costly and very risky. You should not attempt these even if you have the best of intentions.  How do you know if a lender is trying to qualify you for these loans?

• Ask them if the loan is a subprime loan
• Find out what the terms are
• Avoid all adjustable rate loans as much as possible: interest rates are as low as they are going to go, most believe, so you won’t save anything with these low, teaser loans.
• Get a second opinion. If you are unsure of the lender, or their intentions, talk to another lender.
• Don’t be convinced your home is worth more than your appraiser says it is: get your own appraisal to be sure they are not offering a too high estimate.

There are great loans available, especially FHA loans. Many people will qualify for these loans. As time goes on and the markets stabilize, more home loans will be available with less constricting terms, but until them make the best decision for you in the long term.

FHA Secure is an FHA program that you should know about. It was specifically designed to tackle some of the largest problems in the housing industry today and it has done well at accomplishing this, thus far. While I believe there is much more work to do, FHA Secure is a strong program designed to provide people with assistance.

Let’s look at some numbers.

The FHA Secure program is now a year old. During the last year, this program has helped refinance the mortgages of more than 325,000 Americans. That is a considerable number.  The goal of the program is to help at least 500,000 people y the end of 2008 and it appears to be on track to accomplish that.

FHA Secure can help you, too.  This is not a new loan and it is not something that is a free ride. Rather, it gives help to those who need to get into new loans the opportunity to do so. Many homeowners have the ability to pay on their mortgages but may have fallen behind and cannot get caught up. Others have had adjusted rates on their ARM loans which has caused them to fall behind or struggle. These people can pay for their loans with help getting into a better loan. FHA Secure seems to be just what is necessary to accomplish this.

FHA Secure lends help to those needing to refinance their home loans but have fallen behind on their mortgage payments.  Prior to the start of the program in August of 2007, many people were losing their homes after just missing a few payments or being late, after their rates had adjusted and they suffered from an initial shock of that adjustment.

In July of this year, FHA Secure also helped many people that were already at the default stage of the foreclosure of their homes. By expanding who they could help, the program expanded the opportunities for good Americans to remain in their homes.

The program is a good one and will continue to provide this type of help for the months ahead. If you find yourself in this type of situation, contact an FHA loan specialist to get help. They will work with you to determine if your loan situation helps you to qualify for this readjustment. Many American homeowners are able to find help here and can stay in their homes as a result.

As someone that writes about home loans on a regular basis, I fully understand the frustrations so many are going through. The fact is, people are wondering several things.

• Some think mortgage companies are going to come calling to demand payment on full on their mortgage 

• Some people believe that no one will get mortgage loans again, not for a long time

• Others think that the mortgage crisis is going to cause them to lose their home even though they have made payments regularly throughout their loan

These are all mistaken beliefs.

While there are some instances when the mortgage companies can come demanding payment in full on your loan, this only happens when you are in foreclosure, after months of trying to get you back on track. Most lenders want you to keep paying them, they don’t want to own your home. For those who are making timely payments, your mortgage loan will not become due immediately.

As for the second concern, there is some concern here, but not nearly as much as you may think. First, there are loans available from nearly all of the traditional mortgage lenders in business. The requirements are stricter with some lenders requiring more down and a higher credit score before they will lend. Call it the “once burned, twice shy” scenario with home loans.

At the same time, for those without a lot of money to put down and with a credit score that is not as high as it could be, there is the FHA.  FHA loans are still available for most American home buyers. These loans require much less down (just 3%) and they provide you with an outstanding assortment of opportunity: even the fact that these are fixed rate loans.

On the final concern, as long as you keep paying your mortgage back on time, your loan is going to be in good standing and to the mortgage lender, you are a good person to have on board. The only way for lenders to make money is to lend money and charge interest.

Is Now A Good Time To Buy?

Here’s another situation I hear which is one of the biggest problems with the market right now. People who have the money and want the home are avoiding the market. This is a mistake and here’s why.

• The current interest rates on home loans are at an all time low: just 5 percent in some cases. This is the perfect time to buy.

• Lenders want good buyers. They are actively looking to lend to those that want to buy.

• Home prices are also low: lower in some areas than they have been in ten years.

No matter which way you look at it, now is the best time to buy a home, if you qualify for a home loan. If you are not sure if you do qualify, a good place to start looking is through the FHA loan specialists. These professionals provide guidance to prospective home buyers. They also have the ability to help you qualify. This is not bad mortgages, these are good mortgages and some of the safest investments to be in right now.

It used to be common that purchasing a home with little to even no money down was acceptable, especially when you were a first time homeowner with decent or better credit. This “used to be” was in fact just a handful of years ago. The problem is now that lenders are not willing to take on that level of risk any more.

As one of the problems of the current credit crunch, people from all walks of life are finding it more difficult to obtain the loan they need and want to buy a home. The only organization offering any type of mortgage loan under 20 percent down is the FHA. FHA loans with low down payment are becoming the best route for those homeowners who just want to find an affordable solution to buying a home.

Why Creditors Just Aren’t There

Over the course of the last two years, many lenders who typically provide home loans have faced a number of foreclosures on their properties. Some continue to lose money on these properties and are facing an incredible decision: risk losing more money or only lend to those less likely to default.  By requiring a larger down payment, the homeowner is less likely to walk away from their loan since they have a stake in the property. Therefore, these loans are less risky to lenders.

Here’s the kicker: in order for the credit markets and financial markets to get better, the housing market must improve.  In order for the housing market to improve, banks have to lend to borrowers so they can purchase the homes. The cycle is quite limiting and stressful.

What To Do If You Don’t Have 20 Percent

The American family just starting out may have a small amount of money set aside, but most do not have 20 percent for a home. They are struggling to find lenders who will qualify them for a home loan. If you are one of those looking for a home loan with a low down payment, one of the best places to look is the Federal Housing Administration, or FHA.

Here’s how you will benefit from an FHA loan:

• Down payments as low as 3%
• Low interest rates on home loans
• Easier qualifications for home loans than most traditional lenders
• Fixed rates: giving you stability in your repayment terms
• Help even with less than perfect credit
• A variety of programs for those who need help or have unique requirements

As a home loan provider, FHA loans continue to be the best place to go. They are federally backed loans, with a larger amount of flexibility. What is important is to note that the current credit freeze traditional banks are placing on the housing market is unlikely to change right away. But, FHA can help you to get the home you need and want.

Contact a professional to talk about your options. When 20% down is too much, these lenders can help.

Today, the stock market fell, again. How in the world will people make money if they keep losing it? The fact is, the financial markets are horrible and they are shaking even the most seasoned professional investors. So, as an individual with money, where should you put it?

One option you do have is to put the money towards a home investment. Buying real estate now just makes sense. In some areas of the country, the value of real estate has fallen 10 percent, 25 percent or as much as 50 percent. The good news is that the homes are still as highly valued (outside of the financial sense.) Buying a home now can help you safely invest your money. Consider the following.

Let’s say that in your area you invest in a home selling at $200,000. You secure a home loan at 6% through the FHA with a fixed interest rate. You put down $6000, which is the minimum 3% investment the FHA requires as a down payment.  You have a $1200 mortgage payment.

Over the next few years, the home continues to rise in value, as many real estate investors believe that this is the bottom and that housing values will continue to rise. So, in 5 years, at just a 3% gain in value per year, you could have a home valued at nearly $220,000. This would be a low gain, but a safe one.

As you can see, socking your money away into a home loan could make you a sizable profit over the long term. But, even as the market stays well priced, your money is safe. It is not going anywhere. Even if property values fall, you will still be making money in the long term. There is no telling what the future of the stock market is today, but there is only so much real estate available.  It is one of the safest loans.

Do You Qualify?

To get into a safe loan, do consider FHA loans. These loans are the most well priced homes you will find in the coming months. They offer a low down payment. They also provide you with a low interest rate that is fixed for the life of your loan. Those with credit scores that may be slightly low may still qualify for these loans. There are just so many options available.

It is your money and no one wants to lose their money. When you invest in real estate, you do not put your money on the line with investors who may or may not be too scared to allow the stock market to grow. Rather, you have a security at a very low rate. That home you bought for $200,000 was valued at $250,000 or even higher just a year and a half back. As the housing market picks up, it could be back at that level in just a few short months.  For most, this is an option for you.

To the average homeowner or soon to be homeowner, all of the talk about the housing bills in Congress can be confusing. At the end of July, the bill passed The House, and would mean an additional $300 billion worth of housing rescue, but what does this actually mean to the average consumer?

The goal of the housing bill is to help homeowners who are currently struggling to avoid foreclosure, a very real, life changing event that not only affects people today, but well into the future as their credit score is destroyed. In order to provide this help to the consumer the bill will provide additional support to Fannie Mae and Freddie Mac, two mammoths in the lending industry.

At Risk? Refinance?

What the bill will do is to provide people who are in the early stages of foreclosure to refinance their homes into new, more affordable mortgages. First, I would like to be sure you know that anyone can refinance their loans, at any time, assuming they qualify to do so. FHA also provides refinance options. In other words, if you are on the brink, contact FHA lenders to get your loan in place with low risk.

The bill will provide people with the opportunity get out of their unaffordable mortgage and into new mortgages, with a low cost fixed rate. The loans will be insured by the FHA, Federal Housing Administration, giving the borrower much more backing to qualify for a lower rate loan.

According to estimates provided by the Congressional Budget Office, there are about 400,000 people who have some $68 billion worth of loans currently who would benefit from this housing bill’s passage. That is a great number, but there are likely to be many more people who are struggling. The good news is that the housing bill does allow for many more to participate in the program, as many as one to two million borrowers.

The Questions Answered

Who is able to get help through this housing bill?
You will have to live in your homes and your mortgage must have been issued between January of 2005 and June of 2007 in order to qualify. You also need to be spending at least 31 percent of your gross income each month on your mortgage.

Do you have to be in default?
Homeowners who have an existing mortgage or those who are in default will qualify, but you must will have to prove that you are not just defaulting on your mortgage to get a lower payment out of the deal. You also have to prove you can’t keep paying on your mortgage for some reason.

Do Other Loans Hurt?
In addition to the above qualifications, you will also need to pay off or eliminate any other type of debt you have on your home. This includes any home equity lines of credit you may have or equity loans. Once you do this, you will be qualified to obtain an FHA backed loan for your home, again giving you the lowest interest rate possible. You will not be able to get a home equity line of credit or loan on the home for the next five years. At that time, you will need approval from FHA to get the loan, and it cannot be more than 95 percent of the home’s appraised value.

How do I get this help?
To get help from this program, contact an FHA approved lender. FHA will work through various lenders to offer this program to those who qualify. In any situation, you should seek out the help of FHA loans, as even outside this program, many people can get additional help.

In a recent story reported by the Tri City Herald out of Washington, FHA loans are set to move forward at a much faster rate. In their report issued on June 25th, there is evidence that the number of home buyers looking for secure loans through FHA is increasing. This is the same sentiment happening in many cities around the country.

Lenders offering conventional loans are making it more difficult every day for the first time home buyer to get into a home. Those without high credit scores or a significant down payment are finding it difficult, if not impossible to get into the American Dream scenario of homeownership. This has crippled many opportunities for potential home buyers across the country. If you cannot prove yourself through a first time home loan, how will you ever get into a home at all?

FHA has the goal of helping those without significant histories of credit worthiness. They provide insurance to help mortgage lenders accept the less than ideal credit score or the low down payment. First time home buyers are turning in record number to the FHA loans because they are the only opportunities available to them.

Yet, is using an FHA loan a bad thing? Even those who would otherwise be able to get into a conventional loan should be thinking about the benefits of FHA. This includes a lower interest rate, more security, lower down payments as well as the simple fact that lenders are willing to loan with FHA insurance backing the loan.

In the report issued by the Tri City Herald, it shows this through the numbers. From October of 2007 through May of 2008, some 722 FHA backed loans were put in place. That is more than a twelve month space from October of 2006 through September of 2007 (that time period say just 683 loans in a significantly longer period of time.)

The same scenario is playing out in many areas of the country. The fact is, first time home buyers often need this type of loan to get started on the home ownership path. Yet, many other home buyers that would qualify for conventional loans are still seeking out FHA loans because there is less risk and worry.

Are you ready to move forward with a home purchase? If so, find out if you qualify for FHA loans. It could mean the difference between getting into a home or not, but more than likely it means more security.

Congress has made up its mind: it is now in the mortgage business, or at least trying to be. In two proposals, Congress has decided it will help risky home loan holders a helping hand. The problem with such a program is that the details show the difficulties. The program is expensive for already hurting lenders, and borrowers do not getaway without anything either.

The plan is for the government to back some of the more risky mortgages that have put so many lenders in trouble. While it may not sound bad, the problem is how such a program would work, beneficially. Key questions need answers, for example, who would qualify for such help? What would borrowers (as well as lenders) have to do to get into the program?

What is In The Works?
The House has passed a bill that would give the Federal Housing Administration the ability to insure mortgages to those people who are at risk of losing their home to foreclosure. Another bill is in the Senate, and that one gives us a better idea of how the process would work.

In these bills, to qualify, the homeowner would need to be a full time occupant of the property. They must have a debt to income ratio of more than 35 percent. Lenders and borrowers have voluntary participation. Borrowers can contact lenders and lenders can contact borrowers. The lender gets the final say, though, in if the borrower may participate.

Here are a few more points to keep in mind:

• If a homeowner has a second mortgage, the holder of the second loan must eliminate the debt.
• FHA backed loan qualifying individuals may be excluded from the program is the lender believes there is too much risk involved.
• No borrower is turned away just because they are delinquent on the existing mortgage they have or because of their credit score (solely.)
• The lenders must be willing to accept no more than 85 percent of the appraised value of the home (which will include loan fees and closing costs factored in.)
• All FHA backed mortgages must be 30 year fixed rates to qualify.

Look at the math.

A home now valued at $200,000, with a borrower that has an upside down mortgage owing $220,000. The owner’s debt to income ratio has to be over 35 percent, so that means if he makes $4,000 a month, his mortgage debt must be more than $1400. Once he qualifies like this, the process moves on.The FHA program would guarantee 90 percent of the appraised value. This means that the new loan would have to be written down by the lender to $180,000. The remaining value gives the homeowner equity of 10 percent. Also, the lender will need to pay the FHA 3 percent of the loan amount to participate in the program as well as providing another 2 percent for closing costs. That amounts to an additional, $9000 on this particular loan.

When everything boils down here, the lender loses $29,000.

The borrower also has to pay the FHA 1.5 percent in an annual premium to the FHA. The amount of this will diminish over time as the principal on the home falls. An exit fee may also be on the loan, which would be more than 3 percent of the FHA loan amount originally. From the borrower’s look, there is a high risk of being able to get out of the loan affordable if they sell the property over time.Perhaps the most troubling aspect of this Congress made loan process is that it is so confusing. While costly to the lender and to some borrowers, the FHA loan offer here may be an option for some situations. Nevertheless, it has not become law and President Bush has threatened to veto it. He and other critics believe that the taxpayer is being asked to pay some $300 billion worth of poorly backed, bad loans through the program. President Bush has called in irresponsible for both lenders and borrowers.

In recent weeks, there has been a lot of destruction.  Much of the south and central portions of the country have been ripped apart by devastating tornados.  Floods, hurricanes, earthquakes and terrifying thunderstorms have left a path of destruction across much of the country.  Homeowners are barely able to find shelter and yet many are fearful of what will happen to their home’s mortgage. 

For many people who have FHA insured loans, there is some relief available.  According to the guidelines of most FHA loans, the lenders are not able to press you for payment in such circumstances.  They cannot file for foreclosure on your home until a fully 90 days has past.  This gives you time to get things back into place, at least financially speaking, or to find another option.

If your home had damage or destruction, this type of FHA loan backing can be quite helpful (perhaps yet, another reason to consider FHA loans over other types whenever you qualify.)  Now, not all thunderstorms will qualify for this type of help.  It is meant to be in use in only a handful of the worst situations.  Areas that the President has declared to be a disaster area are those that will qualify for this relief.

In addition to this, if your place of employment has been damaged or destroyed at the hands of such weather occurrences or manmade events (like wildfire for example) you too may qualify for such protections even if your home hasn’t been damaged at all.

The FHA insurance on your home is there to help protect you from losing your home, but you still need to talk with your lenders and get into the necessary programs.  Because most lenders are more than willing to keep a good paying customer in their current mortgage, they are likely to have some solution for you.  This can drastically help them save you as a customer and the FHA programs are there to help provide reassurance.

If you believe you may qualify for this type of backing, contact your lender today.  Find out if your particular situation qualifies.  You can also contact your local HUD offices to learn more about the help that is available to you here.  Chances are, there is protection available o you through your FHA loan.

Wait just a minute. As I am catching up on all the various news in the home ownership arena, I had to read this story to see if it was going to tell me anything new that I did not know. Well of course it did. Title was Foreclosures Hit an All Time High. Well you better believe this is an all time high. Look at the subtitle below:

Over 900,000 borrowers are losing their homes, up 71% from a year ago, and a record number of home owners are behind on their payments. Stop the press – 900,000 borrowers. Before long that number will be over a million. Up 71% from a year ago wow! WOW! So how many of those people are getting help. Have any of these people tried to go into a FHA Loan of some sort? Remember there is the FHA Secure or any other FHA product.

There are clearly more people fighting the FORECLOSURE battle than initially suspected. I would even go so far as to say probably everyone knows at least one person that is facing foreclosure and that person knows someone. We have all heard of six degrees of separation which I continue to find out that is true and somewhat maybe even less than that.

Imagine for a moment if you will, I want to add the Colorado Rockies to this analogy because last year they made it to the World Series. Okay, let’s imagine that there are three men on base and there is a guy up to bat. The guy at bat is thinking if I hit a home run, everyone will go in. Bases are load and the first ball is thrown. It is clearly a ball. The second ball is thrown and it a strike. Everyone on the bases is thinking this guy has a history of hitting home runs. The third ball is thrown and he hits a homerun. It is so far out of the park the other team could not even think about trying to catch it. Think about this happening 900,000 times for all those borrowers that are losing their home.

Maybe they were on base 1 and attempted to contact someone before they became behind the first time. Well nothing happened. Then they made it to second base and became behind two months. Since no one contacted them they did not roll the dice. Then they got to the third base and became behind more than two months. Then they reached that crucial month and now it is too late. They are facing foreclosure. They just became one of the 900,000.

What you have to say to yourself is you do not know all the different situations that have led up to the foreclosure for these homeowners. It could have been job loss, health issues, predatory lending or something else. I want to say brace yourself because I believe those numbers are going to continue to rise. We have not even seen the worst of these headlines. Every day clearly someone is facing a choice that they do not want to make regarding housing.

Dr. Taffy Wagner