Sunday, February 8, 2009

FHA refinances - OK to leave second mortgage in place

FHA refinance - what do I do with my second mortgage?
Answer: FHA refinances - OK to leave second mortgage in place.

With many American families losing equity in their homes, and the loose lending practices of the past few years by the big banks, FHA home loans have become the standard again for both Homebuyers and Home owners wishing to refinance.

One of the myth's about FHA financing is that it is for First Time Home Buyers to purchase homes only. The mission of the FHA (Federal Housing Administration), which is supervised by HUD is to help American Families achieve & maintain homeownership. Achieve = FHA Purchase, Maintain = FHA Refinance.

Many families purchased homes during the past few years using a 80/20 combination loan, utilizing a first mortgage / second mortgage combo to reduce the downpayment requirement. With home values dropping in many areas, families may be upside down, and may have been told by their bank that they cannot refinance their first mortgage since their isn't enough equity in the home to also pay off the second mortgage. Enter FHA. With FHA loans, we can refinance your first mortgage into a safe, secure FHA fixed rate mortgage and leave your second mortgage in place.

One caveat: your second mortgage lender must agree to "resubordinate" their second lien behind the new FHA Loan. Many second lien lenders are willing to do this (resubordinate behind a new FHA Loan), as they want to protect their investment. Their unwillingness may lead to more families making the difficult decision to sell via Short Sale or let their home go into foreclosure. In these cases, the second lien holder often receives little or no money, as the home has dropped in value.

The FHA refinance offers stability, security, and safety for homeowners.

Here is an example of how this works:
Joe & Suzy Homeowner bought their home for $400K in 2004 with a 80/20 loan. First Mortgage is a 5yr adjustable rate mortgage (ARM) for $320K, and the second is a fixed rate second at $80K. Their first mortgage is approaching the first Rate Adjustment Change in 2009, and they don't feel they can afford the new payment. ** CALL US NOW, before you get into trouble! Their home is now worth $340K, so their big bank tells them they do not have a refinance option due to lack of equity in their home. Enter the FHA experts at VanDyk Mortgage. We refinance your First Mortgage into a safe, secure, Fixed rate FHA Loan, and negotiate with the second lien holder to resubordinate behind the new FHA Loan.

Summed up: We can refinance your first mortgage into a new FHA Loan and leave the existing second mortgage in place. The Combined Loan to Value (CLTV) of your FHA loan and existing second mortgage can exceed 100% of your homes value.

Please call for details, 866-900-2342 toll free - ask for Brian Skaar.

VanDyk Mortgage has been making FHA loans since 1987. We are a HUD recognized Full Eagle FHA DE underwriter and FHA Direct Lender. Go with the Government Loan Pros, go with VanDyk. Visit us at or call Brian Skaar at 760-752-4480 for help with your FHA Streamline or FHA purchase loan. We offer FHA, FHA Jumbo, FHA Manual Underwrite, FHA Rehab 203K, VA, Conforming & Jumbo Loans. We serve the following areas for VA, FHA and Conventional loans: California,Southern California, Northern California, Washington, Texas, Georgia, Florida, San Diego, San Marcos, Carlsbad, Oceanside, Vista, Escondido, Fallbrook, Bonsall, Riverside, Los Angeles, Orange County, Irvine, Corona, Anaheim, and every other city in California.

VanDyk Mortgage is a VA Direct Lender (since 1987) offering VA Loans such as VA purchase loans, VA Streamline Refinance, VA IRRRL, VA Refinance Loans, VA Mortgages of all types. As a Government Direct Lender, VanDyk Mortgage is also a HUD Full Eagle FHA Direct Endorsement Underwriter, ie FHA Direct Lender offering FHA Loans such as FHA Purchase loans, FHA Refinance, FHA Streamline Refinance, FHA 203K Streamline Rehab loans, FHA Jumbo, FHA Jumbo Purchase, FHA Jumbo Refinance, FHA Jumbo Streamline Refinance, FHA mortgages of all types. We offer FHA & VA loans in California, Georgia, Texas, Washington, & More. Visit us at to get started or just find out more.

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