Servicemembers Civil Relief Act

[Trey]

I just read this on an FHA loan website...

I am in the military on active duty. Do I qualify for a reduced rate on my FHA mortgage?
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The Servicemembers Civil Relief Act was passed in the 1940s to help military people cope with the requirements of being on active duty while trying to meet their financial obligations at the same time. Did you know that you can get an interest rate reduction to go to no more than six percent per year during your active duty service? This is true of both commercial FHA mortgages, but there is one catch. You must make a request to get this reduced rate. You may also be required to renew your request at periodic intervals as permitted by the Civil Relief Act. Make sure you completely understand the requirements of your lender and the rules of the Relief Act to take full advantage of this important FHA loan benefit.


Anyone utilized this or know anything about it?

What happens when you are no longer active duty?

[Purpur]

Yeah, we just went through it all
Once you get out, you have to send them a letter and your APR returns to its original rate.

[Purpur]

ANY debt you incurred BEFORE you became active duty qualifies. So if you have a Target Credit Card from 2001, send them a copy of his enlistment orders and a letter. It's also retroactive to the date he enlisted. It has saved us over $4000 in a matter of 2 months

[Trey]

I thought this was only for when they are deployed? So you mean we can get our credit cards and all that to 6% too?

[Purpur]

Yeppers. Any debt you had before he entered the military is eligible. When he deploys, you can try calling the debts you've gained since then and see about lowering them too. We got 2 of our debts lowered that way (and hopefully will have them paid off before he gets back!)

[Brandi]

Are you serious? So, our cards that are 9-12% can all be lowered to 6%???? I had no idea.

[Purpur]

BTW some places (Wachovia Vehicle Loan Department) will try to tell you that it only qualifies for people who are reserves and called to active duty, but they're full of BS, and if you call them on it (I started reading the def. of who qualifies to the girl on the phone) they back track QUICK and give you the number to fax to or the address to send it to.

[Purpur]

Yeppers!! Hold on, I'll find all the info I have saved on my computer!

[gunsgirl]

to be perfectly clear: it has to be debt incured before AD- so even if you had the card before AD but since then have tallied 20,000 in credit card debt- it does not qualify.

the FHA is great- as long as the debt was incured before going AD. for us with our rate at 6.25 on a house we bought last yr DOES NOT qualify.

and is it by choice for those that do it for debt incured after enlisting- times are tough and alot of credit card co. are saying no way....
but it doesn't hurt to ask.

[Purpur]

http://legalassistance.law.af.mil/co...cap_demand.pdf

The letter to send to debtors.