Livonia, Mich. – Oct. 17, 2007 – Millions of American homeowners are, or soon will be, facing significantly higher mortgage payments, as more than $140 billion in adjustable rate mortgages (ARMs) are expected to adjust upward through the remainder of 2007, and even more will adjust in 2008.
In times past, homeowners simply would have refinanced their mortgage. However, tighter industry lending guidelines, combined with declining home values, have made it more difficult for many to do so. But one stalwart, the Federal Housing Administration (FHA) loan, is making a welcome comeback and offering an ideal solution to many consumers.
FHA loans, backed by the federal government, were created in 1934. They have historically been used by first-time home buyers, as the program requires a down payment of as little as three percent, which can be gifted from a relative, and features relaxed credit guidelines.
Today, for the same reasons, many homeowners are turning to FHA loans to refinance out of resetting adjustable rate loans.
“Many homeowners are finding the FHA program to be their best solution,” said Bob Walters, Chief Economist for Quicken Loans. “The FHA loan is ideal for folks who need to refinance out of an ARM because it requires much less equity with interest rates that are extremely competitive with conventional loans. Along with refinancing, the FHA program also is an attractive option for people wishing to purchase a home, especially those who may have the income to support their monthly payment, but don’t have the cash for a 20 percent down payment, or a lengthy credit history.
“For millions of people, the FHA program is a welcome lifeline in today’s turbulent housing market. FHA loans have historically helped people achieve the American dream of home ownership and that continues today while, at the same time, providing a much needed boost to the nation’s housing industry,” Walters added.
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About Quicken Loans
As one of America’s largest mortgage companies and an FHA-approved lender, Quicken Loans offers industry-leading technology that enables clients to review and sign documents securely on the Web, making the home loan process fast, safe and easy.
For more information about FHA programs, or to talk to a mortgage expert who can help you determine if an FHA program is the right solution for you, visit www.quickenLoans.com/fha.