FHA mortgage rates, like all mortgage and loan rates, fluctuate. This isn’t the sign of impending doom, or a market collapse. It instead is a signal for potential home buyers or people looking to obtain an FHA refinance to learn more.
According to the Richmond Times-Dispatch, FHA mortgage insurance rates have increased for the past three years.
As of publication time, the average rate for a Freedom Mortgage FHA 30 year fixed mortgage is 4.25 percent, less than the average for a conventional 30 year fixed rate mortgage of 4.625 percent. The average rate for a 15 year FHA mortgage is 3.75 percent.
Despite rising insurance rates, the FHA mortgage and loan options are still an affordable solution for many people interested in home financing.
Starting in June, the FHA program will require that mortgage insurance is paid throughout the entirety of the loan, according the Richmond Times-Dispatch.
FHA Mortgage – History
When the housing market collapsed in the late 2000s, much of Â the Department of Housing and Urban Development funds suffered. The insurance rates are a reflection of that, and despite the desire for added protection, most people without enough money for a large down payment on a loan should consider FHA mortgages.
“We must always balance FHA’s risks with the need to preserve access to credit for qualified borrowers, including lower-income families and first-time homebuyers who can sustain a mortgage loan, but may not have 20 percent cash for a down payment,” said Addie Whisenant, a spokesperson for HUD.
If a first time home buyer cannot put down more than 20 percent on the cost of a house, mortgage insurance is required. For the FHA to function properly, and help many people who need home financing, mortgage insurance is necessary. According to the report, without it, many FHA programs wouldn’t be able to function.
For many homeowners who run into financial problems, the Home Affordable Refinance Program, or HARP, can help refinance your home loanÂ in order to keep up with increased mortgage insurance rates. There are several requirements for HARP, and a loan-to-value ratio must be greater than 80 percent, and the mortgage can’t have been refinanced with HARP before. Most choices are more affordable than foreclosure, and all options should be explored.
Preparation is critical for a home buyer, and having more than a 20 percent can dodge mortgage insurance altogether. Pick the right FHA home loan, and use the right financial services.
By staying up-to-date on a fluctuating housing market, you’ll be able to make informed decisions when it comes toÂ qualifying for a mortgage. Using a home mortgage rate calculator provided by Freedom Mortgage to determine your best course of action could keep some extra cash in your pockets every month.
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