One of the main criteria for a loan guarantee from the Federal Housing Administration (FHA) is that the loan must be used for the purchase of a principal residence. If you already have a home loan on another property, therefore, you may be disqualified to get the new loan. FHA house loan requirements are designed to help people who could not otherwise afford a mortgage. If that describes you, even if you already have a mortgage, you may qualify for FHA assistance.
The FHA, an arm of the Ministry of Housing and Urban Development (HUD), aims to make mortgages more affordable. The FHA is working with for the first time or low-income borrowers who have good credit, but may not have the income and savings needed to obtain a low-cost mortgage loan. It does this by offering a loan guarantee to qualified borrowers- this is a form of loan insurance for the private lender, promising to buy the loan if the borrower defaults.
To qualify for an FHA loan, you will need fulfil FHA house loan requirements or almost qualify for a mortgage. If the lender says that you qualify for the loan with the FHA support, then it is a good signal to apply for the loan guarantee. You can also do it on your own without the lender’s suggestion. The FHA will determine if you qualify based on its list of criteria, including: you have a good credit- you have a stable of income that you have at least 3.5 percent of the home sale price for a low PAYMENT – The house you wish to buy qualifies according to the FHA’s inspection and the house will be your primary residence.
If you already have a home loan, there is really only one option to get an FHA loan: make your loan an existing FHA loan. You can do this by refinancing your current loan with an FHA guarantee. FHA does not guarantee a loan on a second property. Only if you want to use the FHA guarantee to make your current mortgage more affordable are you a candidate for this process.
It is important to consider the limitations presented in an FHA loan before deciding to refinance your current mortgage. First, there is a low LIMIT loan – the FHA house loan requirements is conservative with its limits. Second, your property will have to meet FHA loan specifications based on its form, security and other requirements. You will have to pay a mortgage loan insurance premium in addition to your mortgage payment each month if you spend less than 20 percent on the new mortgage. Finally, you will also face future restrictions on refinancing and amending your loan.
How to stop a foreclosure in Canada
Keeping your house after a foreclosure can be very difficult.
If you have a mortgaged property in Canada that you missed too many payments on, your lender may decide to foreclose on your property. If your lender sends you a notice of default and you are unable to repay the amount due by the date of the notice, the lender may initiate foreclosure proceedings on your property. If your property is foreclosed, there are a few things you can do to stop the foreclosure procedure
Things you need
Refinance your loan. Refinancing a mortgage is the process of replacing your old loan with a new one. This is a good option if you can get a lower interest rate than what you are currently paying on your mortgage, or if you want to switch between a fixed rate mortgage and a floating rate mortgage. Contact your lender to find out what your refinancing options are.
Get a second mortgage. In Canada, this is also known as a home equity loan. A mortgage loan uses the money you have already put towards your mortgage as collateral. The more you paid towards your mortgage, the larger mortgage loan you can qualify for. This money is available as a line of credit, which means you only pay interest on the credit you use. Use the home loan to pay off missed mortgage payments and other expenses incurred during the foreclosure process. This will include the legal fees of your lender as well.
Sell the mortgaged property in what is known as “pre-foreclosure foreclosure.” You do not have to do this if you do not expect to be able to pay your mortgage payments in the long run. Register your house with a real estate agent. Tell your lender that you have put the property up for sale and ask them to terminate the foreclosure process. When the property sells, make arrangements to repay your loan with the product. You do not get to keep the property, but you avoid having a foreclosure on your credit report.
File the balance sheet. Your total debt must exceed your total assets to file for bankruptcy. Bankruptcy filing puts a trustee appointed by the government in control of most of your assets. The trustee will sell the assets and distribute the proceeds among all those you owe money.
A mortgage is considered a secured debt, and was not discharged during the bankruptcy unless you allow the lender to repossess. After bankruptcy, you will be released from your mortgage. The main difference between foreclosure and bankruptcy is its effect on your credit rating. Bankruptcy is worse for your credit rating than foreclosure, because it involves all your loans. Treat it as an absolute last resort.