Foreclosure numbers are staggering and they are likely to continue until some type of aid is available to the average homeowner who is losing their job, unable to make payments or just made a poor financial decision. The FHA and HUD actually provide some help to individuals who are facing foreclosure or who wish to avoid it.

What To Do Now

If you are at risk of foreclosure, you need to do something now. Do not wait as this is a sign of your willingness to go through with the foreclosure. Instead, invest the time in getting help.

#1: Talk to an FHA housing counselor about your situation. They may be able to point you in the right direction in terms of stopping the foreclosure process. There IS help available for many people.

#2: Talk to your lender. Today’s lenders are more willing than ever to keep you in your home by finding a solution to foreclosure. When they call, tell them what is happening and what type of help they can offer. They may allow you to skip a payment or help you to refinance the loan into a lower rate.

#3: Find out if you qualify for HOPE for Homeowners, a program designed to provide resources to individuals who wish to remain in their homes but who are having trouble refinancing or getting into a more affordable loan.

Should You Keep Your Home?

Those without income may be unable to remain in their home since no amount of mortgage can be paid. If you do have a job and you do wish to stay in your home, find out if there are any options to help you to do so. If you lose your home to foreclosure, lenders will not lend to you for years to come. With the credit market being so tight, even with good credit, you will struggle to find a lender to buy another loan, or even a rental agent who will rent to you. In other words, if you can stay in your home, do so.

Those who may be having trouble with lenders or those who are unable to find the help they need otherwise, may wish to look for help directly from FHA loan specialists. The goal you have is to get help now. Do not wait since it only takes a few months before you are too far into the foreclosure process to stop it.

The stimulus bill, The American Recovery and Reinvestment Act passed Congress on Friday and is to be signed by President Obama on Tuesday, February 17th.  The Bill does mention the FHA, Freddie Mac and Fannie Mae, the government lending bodies. One of the things the Bill does for these organizations is to raise their lending limits. In 2008, lending limits were raised significantly to allow the FHA to step in and help more people facing foreclosure. Those levels reverted back in 2009. The Bill pushes the limits back to the 2008 level. This means more funds are available for these banks to aid those purchasing homes.

What Do New Limits Do?

There are several things that this new higher limit offers to the mortgage industry. First, by raising the limit, there is more money available to these organizations to purchase loans. This means that when Joe Smith comes to purchase a home, and would like FHA backing on that loan, he can get it because the funds are available to allow for this.

As you know, the FHA allows individuals to get a lower interest rate when borrowing money because it gives the lenders an added insurance that the loan is secure to them. If the borrower with an FHA loan fails to make payment, the property is foreclosed on, but the loan holder can file a claim with the FHA to be reimbursed some money. It works very much like an insurance policy for the lender. Because of the lessoned risk, the lender offers a lower interest rate to the borrower. In short, it aids each body involved.

There are other ways this new higher limit on Freddie Mac and Fannie Mae will. Because it does free up some of this money, more people will qualify in all likelihood for these home loans. With better qualification numbers, more homes can be purchased. People can afford to purchase a home again with the lower interest rate. In turn, more properties that have been sitting on the market or even vacant can be sold. In other words, by raising these limits, the government is aiding in reducing inventory of available housing. This will give cities back their property taxes and aids in boosting other home values throughout the area.

The overall process improves the liquidity of the mortgage market as a whole. Many economists blame at least part of the economic downturn on the failure within the housing market. By restoring some stability here, it could also help to restore some of the value in housing and the markets as a whole.

What Does It Mean To You?

As you consider the Bill and what is included in it, one thing you may want to consider is your own ability to obtain a mortgage and to purchase one of these homes. Not everyone will qualify for a home loan through this program, but far more money is available to help more people to qualify. If you have been considering purchasing a home, but where not sure if you could, or should do so, there benefits of these increased limits makes now an ideal time.

The benefits of having an FHA loan are immense and it should not be overlooked by anyone who is looking for an opportunity to buy a home. Keep in mind that you will still need to meet income and credit qualifications to obtain an FHA loan. If you have been thinking about this type of loan opportunity, take the time to talk to an FHA loan specialist to find out if you qualify for the loan.

Do not make this mistake: Don’t hire someone to help you foreclose on your home or get a short sale for your home. You are wasting your money.

Next, don’t make this mistake: Don’t allow your home to go to short sale or to foreclosure without first contacting an FHA loan representative to find out if there is any help available to you. Most home loan borrowers will find some options to help them avoid losing their home to either of these financially devastating situations.

What happens when you go through a short sale or a foreclosure? What you may not realize is that both have the same end: you will lose your home and you will have long-term damage to your credit record. There is some evidence that both are just as hurtful to your credit, even though many will try to “sell” you on the idea that home foreclosures are worse on your credit than short sales.

What you do not need is to buy information or advice from a third party, especially when you are already having a difficult time with finding money to pay your lender.

Remember This!

If you do go through a foreclosure or you do have a short sale, one thing is for sure: you will be unable to get a new home loan for at least three years that is insured by FHA. Though there are some exceptions, they are few and only in dire situations. The fact is, if you do go this route, you won’t be able to get FHA insured loans later and that will hurt. More so, any time in the future that you apply for a mortgage, even well after those three years, you will need to state that you lost a home to foreclosure or to a short sale.

According to some experts, the only difference in the two in the long term is that in a short sale, you were involved in the process, or “at the table” for what happened. Whereas in a foreclosure, most home owners have little to do with the legal proceedings.

But, I’m Going To Lose My Home!

Those of you who are in rough water right now, hang tight. Contact an FHA loan advisor to find out if there are any current programs in place to help you through this difficult time. Most home owners are able to get the financial help they need. Many will find FHA loan options to keep them in their homes and to avoid all of these costly situations. You do not need to pay someone to short sell your home for you!

There are outstanding opportunities for investment in the home loan field, even if all the news coverage lets you believe there are none. The current mortgage market is getting the squeeze but that is not to say there are not opportunities or that everyone will be effected. Soon to be home owners, or those hoping to be home owners will find options to select from in home loans.

Credit….It Matters

Those looking for an opportunity to find a home loan to buy their dream home, starter home or any home in between, need to realize that credit scores make a large difference. Many lenders are shying away from lending to those who have low credit scores or have had difficulties in the past. With so many filing foreclosure, it’s understandable that these loans are harder to get…but all is not lost.

Even if you do have some problems, there are solutions available to you. One of the best solutions for borrowers with less than stellar credit is to consider FHA loans. FHA is a government department that provides an added level of security to lenders. While they will not help you specifically, they will provide lenders with some security to lend to you. Indirectly, it does help the homeowner though. With FHA insuring your mortgage, lenders look more favorably on your application. They have less risk investing in you with FHA behind you. Therefore, even for those who have a lower credit score, interest rates may be less.

Good Credit Helps

Home buyers with good credit will find opportunities available to them. In some situations, shopping around from lender to lender may give you an advantage at this point. Now, there are less qualified applicants to choose from, so lenders are going above and beyond normal offers to attract good borrowers. It is estimated that as many as 1/3 of applicants who qualified for loans in 2005 and 2006 no longer have the ability to qualify for the same loans today. This takes into account the loss of subprime loans and alternative loans that are no longer being offered as lenders tighten their belts.

Step To Getting The Best Loan

You want to buy a home. You want the most affordable home loan with the largest amount available to you, that fits within your budget. Here are some tips and steps to help you find that ideal home loan.

• Do not overlook the benefits of FHA loans. I cannot stress enough that for anyone borrowing; this is the best route to take.
• Improve your credit as much as possible…or at least do not make it worse. It will make a big difference down the road.
• Compare lenders, not all will offer you the same interest rate no matter what your credit score is. Most lenders will offer FHA loans though.
• Secure a down payment if possible to lower your interest rate and to look more favorable to the home loan lenders.
• Have stable income, and a good employment history. Do not expect to get a loan that offers a large line of credit if you cannot show proof you can actually make the payments.
• FHA administrators are encouraging (and I do too) that you look for a fixed rate loan. FHA loans offer fixed rates and the ability to refinance down the road if you decide to.

Getting a home loan is not easy right now, by any means. Most experts do not believe the mortgage industry is going to get any more flexible until the number of foreclosures slows down. This could take another year or longer to see results in. Yet, you do not have to wait too long to see a home loan. The fact is, with the help of FHA and other loan programs; you can get a good loan at an affordable interest rate.

Any potential home buyer should be concerned with the current housing market. More importantly, they should be concerned with the types of loans available to them. As a first time home buyer (or even those who have been around the block- quite literally) should realize, getting into a low rate mortgage loan offering a fixed rate should be the optimum option. I highly recommend your first contact is through an FHA loan professional. FHA, or the Federal Housing Association, provides fantastic opportunities for individuals looking for affordable loans.

However, should you invest now?

Chances are good you have heard all the worries on the national news programs:

• Credit harder to get
• The housing market continues to fall
• Home values are falling
• There is a lot of risk

Nevertheless, you may not realize that on a more local level, this is not the case. You see, when nationally televised programs are offering stats on how the housing market is doing, they are only seeing the big picture. The facts are that the local picture is much clearer and still offers fantastic opportunities for home buyer. In fact, there is an abundance of homes on the market, many of which are well priced and fully featured; meaning now you will pay less for the home of your dreams than you would have three to five years ago.

Look at a local situation closely. For example, the Port Orchard Independent, a Washington publication, offered a better look of what the housing market is really offering in their neck of the woods. There, for example, there are some excellent opportunities.

• Interest rates on mortgages are at historically low points now, making it more affordable to buy a home at this point
• Washington state banks, consumer loan companies, mortgage brokers and even local credit unions have the funds available to loan to those who have average or better credit scores.
• A variety of FHA programs are now available for those looking for a low cost way to get into a home.
• More variety in loan programs including expanded FHA guidelines make it a better time for the home buyer to get the type of home they want.
• There is a large selection of quality homes, as well as new homes on the market in most areas.
• In Washington, in particular, home values are steady, not plummeting as most news reports show.
• In fact, Washington’s economy is outperforming that of other states and the national economy as a whole

It’s Not Just Washington

While these are some facts about Washington State’s current situation, the fact is, many states are seeing the same evidence. Before you hold back on buying a home because you are worried about the national level of housing market success, look at the local point of view. You may find that the local market is an ideal opportunity for investment.

Make A Personal Decision

It is also important to make a personal decision about investing in a home now. Are you at the right place in your life to make a good investment happen?

Take a look at your current credit score and boost it anyway you can, such as paying down debt and by making payments on time. Also, be sure to pull a credit report to remove any mistakes that could be there. Improve your credit for as long as you can.

In addition to this, realize that the best programs available to you currently are likely FHA backed loans, because they provide lenders with more security and are more likely to be funded at a lower interest rate.

You are an individual who would like to get into their first home. You are worried, even scared to get started due to the number of risky loans out there. The headlines tell the story themselves.

“Subprime Smack Down”
“Foreclosures Increase Homelessness”
“Countrywide Accused of Predatory Loans and Misleading Ads”

And, these are the nicest you have seen. The media has made the housing market even worse than it is. The fact is, for someone with decent credit, there are some of the best opportunities available, especially those who qualify for FHA loans.

Look at the facts.

#1. Home inventory numbers are at the highest they have been in recent memory, which means there are plenty of homes to select from if you are ready to get into them. If you have been on the fence, now is the time to jump off.

#2. Interest rates are at record lows. The Fed recently announced that they would keep interest rates at this historically low point for this quarter (2 percent prime lending is not very bad at all.) In other words, these home loans are inexpensive.

#3. It is a buyer’s market. There is no doubt about it, cheap homes are out there in record numbers. Housing prices have slowly fallen to levels as low as 31 percent of their record high numbers in 2005. They are not likely to continue to fall much farther, many economists say.

For those considering buying a home, there are aspects to worry about. For example, many home buyers are rightly concerned about the risks of getting into a loan that is not stable, too costly or even worse, working with a lender that may go under. Those are important worries, but an FHA loan may help to put your worries aside.

In record numbers, FHA has been helping home buyers to get into more affordable loans. There is no reason to worry about lending when you have this government-backed loan for your home. Moreover, FHA loans are even more affordable than those that are conventional. They are more readily available too, since you do not have to have a large down payment or a perfect credit score to get into them.

The headlines you see are worrisome for many reasons. In addition, while there are risks with some lenders and with those in subprime loans, there are still opportunities available to homeowners who are looking for new opportunities. If you are considering the purchase of a home, get into it through FHA.