You can’t turn on the television or open a newspaper or magazine without encountering a new headline showing the meltdown of the financial markets. Guidelines for conventional mortgages get tighter every day and qualifying may be more difficult than it has been in decades.

This subprime mortgage market meltdown is occurring at the same time that a record number of adjustable rate mortgages with low starting teaser rates are scheduled for rate changes. Because of the low teaser rates, these mortgages are virtually guaranteed to go up regardless of recent Federal Reserve rate cuts. Adjustable rate mortgages which started with rates in the low 5% range are adjusting up to 8% or more. Subprime adjustable rate mortgages are ending up in double digits. Unprepared borrowers will surely end up as part of the default statistics we see every day.

If you can’t qualify for the today’s more stringent conventional mortgage guidelines as a result of credit problems or too little of an increase in your home’s value, there may still be a great option if your loan amount is below $346,250 in more populated Georgia counties and $271,050 in rural Georgia counties. You may still be able to qualify for an FHA loan.

FHA loans allow you to refinance with higher ratios of debt in relationship to your total income. FHA loans allow you to get a mortgage even with credit problems as long as you have a good explanation and the problems have been solved or the new mortgage will help solve them. FHA loans also allow a loan amount that is as high as 97% of the value of your home if necessary.

If you live in Georgia and your current mortgage is an adjustable rate mortgage with an imminent rate increase, don’t give up. Contact a Georgia HUD approved FHA lender and find out if the FHA option is available in your situation. You will certainly be glad you did.

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