FHA Loan Rates : The Basic

The FHA does not set FHA loan rates, because they are not loan money. FHA guarantees loans from lenders who meet the standards of the FHA. These standards include the acceptability of buyer, ownership and assessment of the property title.

An FHA loan has a very low down payment requirement of around 3%. Most borrowers expect to obtain a fixed rate loan. The fact that your loan will be FHA approved and insured may result in a slight reduction in interest rates or mortgage insurance cost as compared to a conventional loan.

FHA loan rates also have insurance costs for the lender, like most mortgage payment less than 20%. In the case of FHA, but, insurance payments are made to HUD rather than a private mortgage insurance company. In an FHA loans, the borrower will be charged an insurance premium between 1.5% – 3.0% of the mortgage and the amount of annual payments following is between 0% and 55% of mortgage loan.

Read also : FHA Loan Guidelines and FHA Refinance Loan

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