FHASecure is the program started last August to allow sub-prime borrowers to switch to low, fixed-rate mortgages after they fell behind on payments because their adjustable rate mortgages reset.

Only about 1.5% of the 200,000 refinances through FSASecure are reported to be for those who were about to lose their homes. The rest were homeowners who met the criteria for the program who simply wanted to lower their payments. You can’t fault the homeowners for taking advantage of the program. New requirements in July will change who is eligible.

The new rules, are as follows:

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There are many reasons why my finances are in good shape. In coming up with a list of those reasons, I noticed that a few were key to my getting ahead. I call these my wealth accelerators because they have had a dramatic effect on my net worth. Without these I would still have a positive net worth, but it wouldn’t be anywhere near where it is. Your wealth accelerators may not be the same as mine, but I suspect that many of these are common to most people.

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As someone who is debt free in all other aspects of my life, it’s probably not surprising that I prepay my mortgage. By prepaying, I mean paying more than the required payment each month. This will allow me to pay off my mortgage in about a third of the time. I’ll save a ton on interest and it seems like good financial sense, but there are some opposing views to consider. The fact that opinions vary so widely on the subject is a good indication that the right answer is highly dependent on your personal situation. Statements like “prepay 10% extra each month and you’ll be in a great position” are of no real value to anyone. There are simply too many other factors:

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A little competition between potential mortgage lenders can help to get you the best deal. Going into the process, it’s good to know the prevailing rates for the type of loan you are looking for. I get that information from the “today’s feature rates” section at Capitol Federal. Those rates may not be what you’ll get depending on your credit rating and location, but give you a ballpark estimate of what you can expect. If lenders come back radically different than what you see there, that indicates that something is wrong. It could be you (bad credit,etc) or them.

The next step is to apply with multiple lenders. You want to balance the work of applying with the benefit of having multiple offers. I usually get two quotes, but more may be even better. Having multiple quotes allows you to bargain back and forth with each company. I’ve found it useful to deal with a specific person (preferably a manager) at the lenders rather than with a generic customer service rep who may not be able to make a deal happen.

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I’ve mentioned it in the past, but confusion over the tax deduction for mortgage interest warrants it being repeated: the deduction is not a reason to have a big mortgage. Too many people get talked into buying more house than they can afford because they get sold on the idea that a big mortgage means a big deduction from the interest you pay. While it’s true that the more you pay in interest, the larger your deduction will be, that deduction is simply returning a portion of your money to you. You would be much better off not paying the interest in the first place.

The amounts vary with your tax bracket, but let’s assume that you are in the 28% bracket. That would mean that for every dollar you spend in mortgage interest, you’d reduce your taxable income by a dollar, which would save you 28 cents in taxes. If you were in the 25% bracket, you’d save 25 cents per dollar spent, etc. Spending a dollar to save 28 cents means that you are losing money. Having a larger mortgage and paying more in interest means that you are losing more money.

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With the current crisis in the mortgage industry, the likelihood of getting a mortgage with little or no money down is considerably less. Usually coming up with 10% down is sufficient to get a loan. The major drawback of putting down less than 20% is that you almost always have to pay PMI.

The method I used to avoid paying PMI on my first house was something called an 80/10/10 mortgage. The idea is that once you put 10% down on your house, you automatically have 10% equity in your home. That most likely qualifies you for a Home Equity Line of Credit for at least 10% of the value of your home. Taking out that credit effectively allows you to double your downpayment and avoid PMI.

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