February 23, 2019

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FHA Home Loans And Interest Rates: Explore Your Options

FHA Home Loans And Interest Rates: Explore Your Options

Concerned about reports of home loan interest rates going up and wondering how to explore your options? There are many ways an FHA home loan can help you in your search for the right home; exploring all your options among several lenders is a great way to start researching and planning for your new mortgage.

FHA Home Loan Interest Rates May Be Lower Than Conventional Rates For The Same Kind Of Mortgage

The key to understanding your options when it comes to mortgage loan interest rates is knowing that your credit scores and other financial qualifications may affect the rate a lender offers you.

Knowing that ahead of time can help you make smarter choices when shopping around for a lender. To start, compare conventional terms and requirements with the FHA loan equivalent to see:

  • how much down payment is required
  • the typical interest rate offered on a given day by that lender for conventional versus FHA mortgages
  • Whether you can apply for a fixed rate mortgage or an adjustable rate loan
  • How much loan you may prequalify for and how much that loan will cost over the full term based on a projected interest rate and down payment amount.

Compare conventional loan interest rates with FHA loan rates as a baseline, and remember that your own credit qualifications may affect those rates.

If you are concerned about your credit history or credit scores affecting the rate a lender may offer you, consider working on your credit before applying for the loan to raise scores and establish more reliable credit habits.

Home Loan Interest Rates Found On Websites May Not Reflect The Rates Offered To You

The statement above that FICO scores and credit history will affect the rates offered you? That is because lower FICO scores mean a greater risk to the lender. The rates you see listed on websites that discuss mortgage loan interest rate trends or other factors are publishing rates listed as “best execution”.

That means the rates published assume ideal conditions-a well qualified borrower with high FICO scores and other factors that can work in the borrower’s favor. The daily interest rates published online don’t take into account your financial picture or credit history at all. That’s an important thing to remember.

FHA Mortgage Loan Interest Rates May Vary From One FHA Lender To Another

It’s a good idea to comparison shop for your FHA home loan because one lender may be more willing to work with you than another where setting or negotiating the interest rate on your mortgage is concerned.

Some lenders may have higher standards or requirements than others; you may find that your FICO scores and any compensating factors such as a larger down payment or the willingness to pre-pay certain expenses may get you a better negotiating position with some financial institutions.

Try to compare several FHA and non-FHA lenders to see who offers the most advantages to you; you’ll be glad you explored your options even if many of them appear to be similar. It only takes one better offer to get started.

Joe Wallace - Staff Writer

By Joe Wallace

August 10, 2018

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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About FHANewsBlog.com
FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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