For anyone in the market for a home as a first-time buyer, the FHA loan program may offer the option to purchase a home much earlier than imagined. The FHA mortgage program is insured by the Federal Housing Administration. This means that the lender the buyer works through is protected by the FHA should the buyer default on the loan at a later point in time.
Many people interested in purchasing a new home cannot qualify for conventional mortgages. This is typically due to low credit scores, low-income levels or a limited amount of money to use a down payment.
Additionally, the FHA loans offer a more buyer-friendly interest rate, even for people with credit scores at 580 or higher. Lower down payments of 3.5% for qualifying buyers and the lower FHA 30 year mortgage rates over conventional loans make this an attractive option.
The 30 Year Advantage
By choosing the FHA 30 year mortgage rates over other types of fixed rates or adjustable rates, buyers can budget for a set mortgage payment that is going to remain consistent throughout the life of the loan. Without the fluctuations in the mortgage payments, homeowners have the peace of mind in knowing just what they have to pay per month. Additionally, with the 30 years of payments, the monthly payment is lower, which may allow you to upgrade to a larger home.
Keep in mind that along with the fixed FHA 30 year mortgage rates, homeowners will also pay an upfront premium on the loan as well as an annual premium. The annual premium is part of the monthly mortgage payment and will be included throughout the life of the loan.
While the premiums do add slightly to the monthly payment, they are often easily offset if the interest rates rise. With the FHA 30 year mortgage, as with other conventional loans, refinancing will be possible should that prove to be in your financial best interests.
For the most accurate information on FHA 30 year mortgage rates from a FHA-approved lender, talk to the professionals at Guaranteed Rate.