FHA and VA Loans

In today’s turbulent market its nice to have the financial strength of the Federal Housing Authority (FHA) and their guarantee behind a majority of the loans we make.

With the passage of recent legislation, now more than ever in the history of the (FHA) have they been asked to be proactive in the guidelines and process to help bring much needed financial relief to the many tens of thousands of homeowners facing extreme financial difficulty today and also to help bring balance and stability to our ailing housing market.

Some of the benefits of using the (FHA) product line we have available is relaxed / enhanced underwriting guidelines, that allow for borrowers with less than perfect credit to receive loan approval plus low fixed rates. In addition to the relief these loans provide, they do it without the high back loaded cost of prepayment penalty’s (PPP) that many homeowners are dealing with today, some of which are costing these homeowners upwards of $10,000 just to get out from under a loan they most likely should not have ever been in, in the first place.

Hi-Risk loans like…
~ (POA) Pay Option ARM’s - that include 4 payment options and are typically presented to unsuspecting homeowners as 1% interest loans. These loans were designed for self employed borrowers who could have large adjustments to their income and cash-flow on a month to month basis. They are not designed for the borrower who earns a steady income and contain very harsh features if the minimum payments are made and the loan balance hits the threshold limit (typically 10-15% over the original loan balance). The true interest rate on the majority of these loans are at or above the 7-8% mark and also have the ability to adjust monthly NOT annually as most federally backed adjustable rate mortgages(ARM’s) are.
~ I/O, Interest Only loans - these loans are truly designed with the end investor/servicer in mind. Your loan balance may not actually accrue to a higher balance (as with the POA) but since you are not paying any reduction to principle each month, your mortgage payments are paying the lender at the highest point of the loan (the original balance). A feature almost never mentioned about these loans is that, regardless of the payments you have been making full or the interest only portion, your loan WILL recast after the initial I/O period (typically 5 or 10 years) into a FULLY amortized loan based on the outstanding balance at the remaining term of either 20 or 25 years. So if you have been making the interest only (I/O) payments for all or a large portion of the time and are unable to refinance, or the market is not conducive to providing you with a benefit in doing so, this can make your mortgage payments take a significant increase by now making the loan require principle reduction and at a shorter term to do it in, not to mention years of payments with little to no equity.
~ 2/28 and 3/27 Sub-prime loans - these loans typically contain a high interest rate and the fixed portion only lasts for 2 to 3 years from time of closing. They were primarily targeted to borrowers with either less than perfect credit, little to no money down, higher than normal debt to income ratio’s or borrowers who could not prove their income. They almost always contain large prepayment penalties (PPP) as well. These loans might have helped some borrowers get into homes they couldn’t afford but that has also helped drive the increase and need in aid to the housing crisis we are currently facing.
~ 40/30 & 50/30 Balloon mortgages - there are thousands of unsuspecting homeowners who think they are in standard 30 year mortgages that actually have a large balloon to contend with, should they still be in the home and the loan at the end of the term. Some of these borrowers are scheduled to pay for their home for 30 years and then have a balance almost 65% left outstanding when the 360th payment has been made! These were brought out to help lower a borrowers monthly mortgage payment but many of these homeowners that have these loans are unaware that they are in them and that they will still have a significant balance to deal with at the end of the term, typically 40/30 and 50/30) which mean you pay as if your loan term is either a 40 year term or a 50 year term but at the end of 30 years the remaining balance is due in full.

These are just some of the loans that these recent bills have been specifically targeted towards.

If you find yourself in a loan or situation as mentioned above, or one close to it, please contact us as we might be able to assist you with one of the creative and innovative products backed by the federal housing authority (FHA) and designed especially for the aid of American homeowners that have been hurt from “predatory” and poorly disclosed Hi-Risk adjustable rate (ARM) and sub-prime loans.

We can help but it starts with a call or “quick apply” our secure contact form found on the contact / apply page on this site.