If you are interested in what interest rates to expect when borrowing with an FHA insured home loan, than this is the article you will need to read, and luckily for you, it is not too long. If you are in the market for a FHA home loan then you have questions about the interest rates. First of all, you may have contacted a lender just to hear them tell you that FHA home loans and FHA rates are bad and you can do much better with conventional financing. This simply is NOT true.
One common mistake that many inexperienced buyers make is to assume that everything in the home will be included when the seller finally moves out.
They may try to dissuade you by talking about the FHA mortgage insurance premium and how expensive it is. There is mortgage insurance on any loan that you put less than 20% down (excluding sub-prime loans but the interest rates are much higher). FHA rates are as good as conventional rates. Whatever the going rate is for conventional loans you can get the same rate for FHA home loans.
You must understand that FHA is NOT lending you the money. Lenders are lending you the money and the Federal Housing Authority is simply insuring against the lender taking loses on the first 20% of the loan if you were to default on your obligation. You can simple think of FHA as an insurance company and you pay a premium on behalf of the lender in order to qualify for a home loan. Because FHA is taking the majority of the risk, they make the rules. The US Government believes in home ownership and want to encourage it.
Any object that is not directly attached to the home is considered personal property. This can range from furniture, appliances, picture frames and even flower beds. Some sellers may not take it this far to remove flower beds but you would be surprised.
Interest rates can be manipulated by paying points. One point equals 1% of the loan amount. When you pay a point you are in essence paying upfront interest and the lender will lower your loan rate for the lifetime of the loan. I do not recommend paying points in most situations. If you know anything about me, by now you know that I want you to keep as much money in your pocket as possible.
Be firm in your negotiations Sellers are often hopeful that they will have an inexperienced home buyer so they can take advantage of them. As ridiculous as it may seem to have kitchen cabinets or outdoor garden in writing, it is completely necessary. Once the home is closed then it will be difficult to further enter negotiations and you will have to make due.
One last thing; if you qualify for an FHA home loan then you qualify. Many lenders will tell you that you are approved but your credit is on the low side so they will have to increase your rate. Don’t buy it! They are just trying to make more money off of you because of your lack of education. If you qualify you qualify, period. To summarize, FHA rates are as good as standard conventional financing. Finding out what prevailing rates are is simple, just search the Internet. Remember that rates change every day which means what you qualify for changes everyday.
Paul Amos is an Author His latest website is about Looking for Refinance resource? Click here for real time rates Current US Mortgage Rates discover them
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