How Does the FHA Mortgage Rate Compare to Other Lenders?

An FHA mortgage rate could be the best route for you to take if you are in the market for a new home loan, or you plan to refinance your current loan. An FHA loan is not from the government directly, but the government does provide the lender with more security. Because there is less risk involved in the lender loaning to you under this type of mortgage, you will have a lower interest rate or be better able to qualify for the loan.

Understanding FHA Mortgage Rates

It is very possible that an FHA mortgage rate will be lower than other lenders will offer. This is because the FHA provides level of reassurance to the lender that you will stay in your home loan. This is done similar to an insurance policy. You pay the premium through your loan to your lender. Your lender pays this premium to the Department of Housing and Urban Development, or HUD, which oversees FHA. In return, the FHA promises to back up your loan, to a certain level if you stop making payments.

Keep the following in mind:

• You have to meet the qualifications of the FHA to qualify.
• For some, an FHA loan is the only way they will qualify for a loan, since the requirements are often lower than other lenders.
• You may still find a better rate outside of FHA, if you have excellent credit and a solid down payment on the home.

Nevertheless, you should consider the options available to you through an FHA loan. You can ask your lender directly if you qualify.

Hire an Attorney

Before you sign any document for a loan, be sure to have your attorney look it over to ensure that it is giving you the best possible outcome. In addition, you want to be sure you understand the entire loan before you sign it.