Since the housing bubble has burst and the economy is at risk for a variety of factors, many people are finding themselves in trouble. Many of these people got mortgages that were adjustable-rate mortgages, for example. With rate increases becoming more and more common, these folks now cannot make mortgage payments on time or in full. However, even for someone in this situation, there is a new option, called the FHA Secure Loan.

At the end of October 2007, President Bush was the one to announce that a new FHA Secure Refinance Loan would be launched. It was designed to help homeowners avoid delinquent payments and even foreclosure. When it comes to the new mortgage product that is now available, basically it is a refinancing product designed to help people who are suffering from higher mortgage payments. This new product requires escrow for both insurance and taxes and will offer excellent assistance for people trying to avoid foreclosure.

FHA Secure Loan Benefits

There are several benefits on offer with the FHA Secure Loan, and details of just a few of these are listed below.

Benefit #1 - Prevention of Foreclosure - One of the most important benefits homeowners can reap with this type of loan is the ability to prevent foreclosure. The thought of losing your home after many years of making your mortgage repayments on time is devastating but it does not have to be this way and help is at hand for people with a good payment history.

Benefit #2 - No Prepayment Penalties - FHASecure also offers homeowners the benefit of no prepayment penalties. Of course, other mortgages are offered that do include prepayment penalties, but this is not one of them. Because the FHA is fully aware that people are already struggling to make payments, penalties will be avoided so that homeowners can not only skip this particular hardship, but they are also assured they will not be penalized for paying off their mortgages early.

Benefit #3 - Keep Your Good Credit - Of course, if you have to foreclose on your home, it can mean major damage to an otherwise good credit report. It can also create problems that you will carry with you into the future. You might have difficulty purchasing another home, getting a credit card, or even renting an apartment. However, the FHA Secure Refinance Loan helps you avoid just this type of situation by letting you sidestep foreclosure and keep your good credit.

FHA Secure Loan - Criteria To Be Met

It is important to note that this is not for everyone. Those applying for the FHA Secure will have to come up to certain criteria in order to qualify for the loan. The following are the five points of criteria that you must come up to in order to be eligible for this mortgage.

1. You must have a good history of making timely payments prior to the date the original rate expired when the loan was re-established.

2. You must have had consistent employment to qualify for the loan. This is to ensure that you can pay off this new loan.

3. Homeowners must also be able to prove that you make enough income to pay the new mortgage payment each month on time.

4. At least 3% of the loan amount either in cash or equity in the property has to be provided by the applicant.

5. In order to qualify for the loan the homeowner must show that their current interest rates have been reset since June, 2005 or that such resetting will occur prior to December 2009.

When all is said and done, the FHA Secure Loan will be able to provide much-needed relief for those who have been responsible homeowners and mortgage payers in the past and whose problems stem from the current market conditions and such vagaries as the adjustable-rate mortgage. FHASecure will likely bring more liquidity to a mortgage market that has struggled mightily within the past year. In the near future, it is also likely that other lenders will offer similar loans. Therefore, if you are in danger of foreclosure, this loan may just save your home and allow you to reestablish a secure foundation once again.

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