Do you currently have a subprime loan?  If you do, don't worry, there are a number of options out there that may be able to help your situation.

Having a subprime loan doesn’t mean that you are a bad person.  It doesn’t mean that you are a bad borrower. It doesn’t mean that you need to wait to see what options are available to you. 

It means that you need to get educated about what your options are n-o-w.

First, check your loan paperwork.  Does the ARM have a pre-payment penalty?  Most do.  A pre-payment penalty can limit your options, but it doesn’t mean that nothing can be done.  If it does have a pre-payment penalty…when does it expire?  Most expire at the end of the 2 year period.  But I have seen a couple of 2/28 ARM loans that had a pre-payment penalty that did not expire until a full year after the first rate adjustment.

If your loan has already reset, the rate and payment has probably gone up significantly.  Many thoughts may go through your mind.  How am I going to afford this?  Will I have to sell my home?  Will the bank foreclose on my home if I can’t pay this?

Whatever you do.  Don’t panic. 

Don’t fall into a scammer hands with “home equity protection” type schemes.  Talk to your current lender.  Find out what options are available to you through them first.  If they aren’t interested in your business, go elsewhere.

If you have always made your mortgage payments on time before the rate reset and now find yourself behind on the mortgage payments, there is help.  The FHA Secure loan was created to help those who were put into ARM loans that have reset and caused a financial crisis.  With the FHA Secure product, it does not matter how far behind you are on your current mortgage payment.  If you never had trouble making your mortgage payments prior to the rate resetting.  The FHA Secure loan can help.

The FHA Secure loan can even help when your current balance exceeds your homes current value.  If your current lender is willing to accept less than the full balance to pay off your mortgage, which many times they will, the FHA Secure loan can put you into an affordable fixed rate mortgage. 

Many people have asked me, “Why would the bank accept less than what I owe on my home?”  The answer is, the foreclosure process is expensive and time consuming.  In most cases, lenders would rather take a small loss on the mortgage balance rather than having the legal expenses incurred to foreclose on a home, put the home on the market (which includes paying real estate agent commissions), and selling the home for even less than it’s true market value.

Make sure you are talking to someone who knows what they are talking about if you currently have a 2/28 loan — there is a window of time that is closing rapidly where you can improve your situation by choosing the right FHA Mortgage Refinance option -- quite possibly the FHA Secure program.