Business & Finance Finance

Fha Home Loan Mortgage Rates

Home buyers who intend to purchase a new home this year may want to look into getting an FHA backed home mortgage loan. Interest rates on FHA loans are at an all time low as a result of the financial crunch that has been affecting the country for the past few years. Lenders are more eager these days to part with home mortgage loans, especially those that are backed by the FHA's guaranty. Those home buyers who qualify for an FHA home mortgage loan can expect to have extremely competitive interest rates, particularly on 15 and 30 year mortgage terms. Although you can expect to find low interest rates with an FHA backed mortgage loan, you should know that because the FHA doesn't actually lend the money, they have no control over the interest rates.

It's true that interest rates can and often do vary from day to day which is why it is very important that when you find the lowest rate that you can, that you lock it in, even if you aren't quite ready to buy yet. Interest rates on FHA home mortgage loanswill also vary depending on the type of mortgage that you get. For instance, adjustable rate mortgages (ARM) may have slightly lower interest rates that fixed rate mortgages. What you have to look out for with an ARM is the possibility that the interest rate may increase significantly quite suddenly, leaving you with a much higher monthly payment that when you first started out. With a fixed rate mortgage, your interest rate will remain the same throughout the loan term. Your mortgage rate will also depend on how much of a down payment you are planning on making. With FHA mortgages, it is possible to finance up to 97% of the total loan amount but the more you finance the higher the interest rate will be.

You can use the mortgage calculators and mortgage interest rate information here on Offer to Lenders to figure how much your monthly mortgage payments would be using a variety of interest rate combinations. Then you can shop for a home mortgage by naming the interest rate that you want and let lenders compete to win your business.

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