FHA mortgage rates

Today’s FHA Mortgage Rates

FreeRateUpdate.com researches wholesale lender’s rate sheets directly to get the most accurate and up to the minute mortgage rates. Our research of mortgage rates today shows FHA mortgage rates significantly improved last this week closing any gap there was between FHA and conforming mortgage rates. Today’s FHA mortgage rate 30 years fixed is 4.5%, down from 4.625% and more prominently 4.75% available earlier in the week. Big banks refuse to change their offering on FHA mortgage rates 30 years fixed and are still offering 5% for the most part. Today’s 15 year fixed FHA mortgage rate is 4.5%. Today’s 5/1 ARM FHA mortgage rate is 3.625%. We do not recommend anyone getting a 5/1 FHA ARM unless you are absolutely sure you will not be in both the loan and home in 5 years.

Current FHA loan rates

Current FHA loan rates as mentioned above are comparable to conforming mortgage rates. We found most lender's offering 30 year fixed FHA loans at 5 percent at par. A handful of lenders have a par rate of 4.875 percent. Par rates are lowest available interest rates by a lender without requiring the borrower to pay additional points and fees known as a buy down. Current 15 year fixed FHA loan rates are at 4.375 percent at par, again it's likely the lowest 15 year fixed FHA rate you'll find is slightly above this. Currently FHA 5/1 ARM's are available at 4.25 percent at par. The 5/1 ARM varies from lender to lender and you can probably hunt one down in the 3's.

FHA loan changes

Recently congress extended the increased FHA loan limits through 2010, that's one worry out of the way for potential home buyers. The Obama administration announced their suppport for an extension of the $8,000 tax credit set to expire. FHA's top dogs rebut reports FHA is headed for too big to bust status denying they'll need a bailout.

FHA Loan Rates Forecast

The 10 year treasury yield, the best indicator for forecasting FHA loan rates and conforming mortgage rates is at 3.47, near a 3 month low. Goldman Sachs said early last week they expect the yield to descend to 3 percent by the end of the year. If Goldman’s forecast for the yield is correct FHA loan rates should waiver between 4.5 and 5 percent for the rest of 2009. Lower FHA loan rates can provide a major boost to the housing market as 25 percent of new mortgages are FHA insured loans.

FHA Loan to Buy a Home

Major organizations continue to lobby for an extension of the first time home buyer tax credit of up to $8,000 available to anyone purchasing a home for the first time in 3 years. The program is set to expire before the end of this year. Fha loans are credited with stabilizing hosuing markets as bargain hunters use FHA insured loans to buy homes with minimal money down, the kicker for many shoppers hesitant to part ways with cash in the recession. Downpayments of just 3 percent are common on FHA purchase loans.

30 Year Fixed Mortgage Rates According to FreeRateUpdate.com Research.

Our research of wholesale mortgage lender’s rate sheets shows 30 year fixed mortgage rates of 4.875 percent, at par. Par rates are what borrowers with excellent credit and at least 20 percent equity in the home qualify for at regular points and fees. We’ve reported 30 year fixed mortgage rates at 4.875 percent for almost every day this month. The benchmark 10 year treasury yield, the best indicator for 30 year fixed mortgage rates has sea sawed this month bouncing around from 3.78 to 3.295. It’s likely if the yield dips under 3.3 30 year fixed mortgage rates will drop to 4.75 percent.

The spread between 30 year fixed FHA loan rates and conforming mortgage rates remains marginal, about an 1/8 of a percent max.

Jumbo 30 year fixed mortgage rates continue for the most part to be 1/2 to 1 percent higher than conforming 30 year fixed rates.

FHA Loan Rates:

FHA loan rates are driven by the same yield, the 10 year treasury yield, that drives conforming Fannie and Freddie insured mortgages. Currently 30 year fixed FHA loan rates are as low as 4.875 percent. Normal points and fees apply. Also FHA loans require mortgage insurance making them more costly then Fannie and Freddie insured mortgages.

FHA Loan Refinance

FHA is unique in that a FHA to FHA refinance can be done without documentation. This refinance transaction is called a streamline.

80/17 FHA Loans

FHA has a program called the 203k in which the 1st and 2nd mortgage are both 30 year fixed loans with the same interest rate. The combined loan to value of this loan is 97 percent with 80 percent on one loan and 17 percent on the other.

FHA Loans for Homes in Need of Renovation

As foreclosures mount many buyers seeking bargains find themselves buying a home in need of renovation. FHA has a program that allows financing $35,000 above the loan amount for repair work at the same interest rate. For this program you need a licensed contractor to give you a bid for the work to be done.You can delay payments for 3 months, live at a different location until the repair work is complete.

FHA Loans Stabilizing Some Areas Median Home Values

FHA loans are credited with stabilizing home prices in some areas. Buyers not willing to part with a large chunk of cash are getting into homes with little initial investment. Since the pickup in FHA loan origination home values have stabilized as evident in recent Case-Shiller reports.

Today’s FHA loan rates:

30 year fixed FHA loan rates are as low as 5 percent with zero buy down points. Buy down points also known as discount points. 15 year fixed FHA loan rates are as low as 4.625 percent with zero discount points.

Home Tax Credit for Buying with FHA Loans:

Much of the housing rebound analysts credit to the $8,000 first time home buyer tax credit. The tax credit contains income restrictions but is available to almost anyone who has not purchased a property in the past 3 years.

FHA Loans Stabilizing the Housing Market.

Homes are more affordable than ever according to the home affordability index. Despite record low rates for most of 2009 we’ve seen double digit drop offs in home sales compared to last year. Last year at this time 30 year fixed mortgage rates averaged 6.4%. One reason for the drop off in home sales is the more strict underwriting guidelines requiring 20-30 percent down payments. FHA loans allow home buyers to purchase with little to no money down. FHA loans are the only financing available for people wary of declining markets in a cash rules market to get into a home without breaking their bank. FHA low downpayment loans are credited with stablilizing many US markets as buyers take advantage of bargains on foreclosed properties without tapping into their 401k.

Do you need more incentive to Purchase a Home? Historical Low Rates Not Enough?

HOME (Home Ownership Moves the Economy) makes an up to $8,000 tax credit available to anybody who hasn’t bought a home in the past 3 years with a few income restrictions. This tax credit is set to expire on December 1st, 2008. HOME is credited for boosting home sales reported up month over month for the past 5 months.

Want to Buy a Home but Don’t Qualify for a Tax Credit? New Legislation May Open the Tax Credit to Everyone.

I wrote a month ago that the Obama administration might attempt to emulate cash for clunker’s success in the housing sector. The government has drawn up legislation to open this program up to everyone and extend it into 2010. The rationale put forward by the real estate industry as to why congress should extend the tax credit is that the extension would boost home sales and jobs tremendously. Economists say in a recovery the first thing to bounce back is the auto industry followed by real estate

The average mortgage interest rate for a 30 year fixed home loan was 5.12 last week according to Freddie Mac. Our research of wholesale lender’s current mortgage interest rates shows 30 year fixed interest rates as low as 5% with zero buy down points available today.

The outlook for interest rates next week is unclear though many analysts predict mortgage interest rates will rise when the Fed discontinues its buying of home loan bonds in December. Higher interest rates combined with lower home values will shut the door on many homeowners who hope to save money by way of refinance. .

Other Mortgage Refinance Interest Rates:

15 year fixed mortgage interest rates are as low as 4.5% today. 5/1 ARM current interest rates are as low as 3.75%. Current interest rates do not include buy down points. Buy down points lower the interest rate and are in addition to normal points and fees.

There are several groups of FHA loans available today.

If you have an existing FHA loan you may be eligible for an FHA streamline refinance. A loan does not need to be an FHA loan to refinance into an FHA loan. A major factor for FHA loan’s popularity is that FHA loans allow the purchase of a home with very little money down but only if you have the income to support the payments. Another benefit of FHA Loans are $8,000 first time home buyer tax credits appplicable toward closing fees available as part of the stimulus package until later this year.

On Friday afternoon benchmark 10 year treasury yields closed at 3.56 down (0.92%) on the day. 10 year Treasury yields, are a leading indicator for 30 year fixed mortgage rates. Consequently rates decreased steadily as the week progressed driven down by the Fed’s Treasury auctions and weak retail sales data.

Bond demand most likely will continue to be strong, keeping yields and mortgage rates down. Fears of inflation will almost certainly take a back seat to consumer confidence worries. Analysts say inflation is not an immediate threat and in fact will be minimal as long as unemployment is exceptionally high and the consumer price index stays flat.