FHA Interest Rates

Since 1934 the FHA has been helping American families become homeowners by making the entire loan process as simple and affordable as possible. The FHA does this by limiting the cost of the down payment, lowering interest rates, offering streamline refinancing and being lenient in regards to credit scores. The low interest rate is one of the best features of an FHA Loan, but it still depends on a few factors, such as your credit score, debt-to-income ratio and the current mortgage market rate.

Credit Score

Conventional loans require you to submit your credit score so that the lender can decide how much to loan you and what your interest rate will be. This is the same for FHA Loans, although they are much more lenient. Even if you can’t qualify for a decent rate with a conventional loan, chances are the FHA will be able to help you out by giving you a competitive interest rate.

Debt-to-income Ratio

You debt-to-income ratio is your total salary minus all your monthly payments. This is how much money you have left over each month that can go towards making mortgage payments. The better your ratio is, the lower your interest rate. As with the credit score, the FHA is often willing to help you out even if your ratio is not great.

Current Mortgage Rate

The US has a set mortgage rate that changes from year to year, and is a basis for how much lenders will charge borrowers. This number is a guideline, so depending on your situation you may get a higher or lower rate than this. With an FHA Loan, you are a very secure and thus desirable borrower, which means you can often negotiate with your lender for a rate that is below the current mortgage market rate in the US.

Refinancing

Keep in mind that even if you get an interest rate that is higher than you’d like, it is still possible to refinance in the future for a better rate. The FHA offers a streamline refinance which requires no additional paperwork or out-of-pocket expenses, making the refinance process very simple and affordable.

Get Started Today!

Getting pre-approved has never been easier! Simply take a minute to fill out our free and secure online form and we’ll have you well on your way to obtaining an FHA Loan.

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