FHA loan rates were steady this week amid several up and downs in the Residential Mortgage Backed Securities Market. FHA mortgage rates for the most part mirror conforming mortgages; however, FHA offers several programs and therefore rates vary. Closing costs on FHA loans are always higher than comparable conforming mortgages because PMI (mortgage insurance) is collected up front. In taking a look at Wells Fargo's FHA loan rates we came to the conclusion they're not competitive. We did find another major lender, HSBC, offering competitive FHA mortgages. Just a heads up for FHA loan shoppers, FHA loan rates vary greatly from lender to lender so shop dilligently.
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.