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What You Ought To Know About FHA Home Loan Rates

By Harriet Colt : A how to tutorial about fha-home-loan-rates, Finance with step by step guide from Harriet Colt.

FHA home loan rates are interest rates on home loans taken from an authorized agent of the Federal Housing Administration (FHA). FHA home loan rates are lower than all other conventional forms of mortgages because the FHA insures the mortgage amount and thus reduces the level of risk for lenders. These can be flexible or adjustable, depending on the type of mortgage loan. The FHA adjustable rate mortgage loans are specifically designed for low and moderate income families who intend to invest in a home of their own. The fixed rate FHA home mortgages are ideal for those who are young and still studying.

FHA Home Loan Rates: Facts and Features
Borrowers must understand that FHA does not set mortgage rates, as it is not a lender. It only provides insurance to certain lending agencies and encourages them to work with borrowers even if they have had credit issues or are not financially sound. FHA-insured loans may provide up to 97% financing to help borrowers own their home. Here are the main features of FHA home loan:
*These loans require a low down payment of 3%
*Fixed rate FHA home loan rates are based on current market rates and the credit rating of the borrower. The backing of FHA means that interest rates may be a little lower than market rates.
*FHA loans also include the cost of insurance which must be paid to the FHA and commercial insurance broker
*They also allow for financing of closing costs of a mortgage and put limit on the extent of closing costs
*In adjustable rate FHA loans, the index used for deciding the rate is the one year Treasury bill interest rate with annual increases capped at 1%.
*The maximum rate is capped at 5% higher than the original.
*They are also available to people who have filed for bankruptcy as long as the same has been discharged for two years.
*Available to first-time borrowers as well as persons wishing to refinance an existing mortgage loan.
*They allow you to get a gift of your down payment from a relative or a family member.

Ratesarehot.com can help you in finding the best FHA home loan rates. FHA home loan rates are extremely competitive and are the interest rates on home loans taken from an authorized agent of Federal Housing Administration (FHA), which insures the mortgage amount.

Original article published on PubArticles.com

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