FHA mortgage rates continued to hold at near record lows this week. Prices of Residential Mortgage Backed Securities which move opposite FHA loan rates moved upward this week despite weak demand at the treasury bond auctions held by the Fed. FHA reserves required by the government fell below minimum levels it was announced this week. FHA says they are not in need of a bailout and this issue continues to be a non factor as far as FHA mortgage rates are concerned. Though there’s been lots of talk about FHA overhauling down payment requirement and their underwriting guidelines it continues to be just that, talk. FHA mortgages are credited with saving many markets from collapse across the U.S. and account for an increasingly large percentage of all new mortgages.
Current FHA Mortgage Rates
Today’s FHA mortgage rates are near record lows as the FHA 30-year fixed-rate continues to mirror that of conforming mortgages. The most accurate way of determining current mortgage rates is by taking a look directly at wholesale mortgage lender’s rate sheets. FreeRateUpdate.com research of wholesale mortgage lender’s rate sheets shows the following.
The current FHA 30-year fixed-rate is as low as 4.75% at par. Most banks are offering FHA 30-yr fixed rates of 5% but we did find lender’s pricing 4.75% at par. The current conforming 30-year fixed-rate is 4.75% at par as well.
The current FHA 15 year fixed mortgage rate is 4.5% at par, slightly higher (.25%) than that of conforming mortgages. The current 5/1 ARM FHA rate is 3.75%, also a 1/4% higher than that of conforming mortgages.
The difference between FHA and conforming mortgages is?
There’s 2 MAJOR differences in FHA mortgages and conforming mortgages. Currently the biggest difference is in purchase loans and the required down payment. While conforming loans require 20% down FHA mortgages can be obtained with as little as 3% down. The second biggest difference is in closing fees. Closing costs on FHA mortgages are considerably higher than that of conforming loans.