Today's Mortgage Rates

First of all, we’d like to announce the initial launch of our FHA Loan Calculator here on Mortgage Loan Place. We realize that many of our visitors that are interested in FHA mortgage information can benefit from testing out some financial scenarios using the calculator before worrying about contacting a loan officer. Look for updates to make the FHA calculator even better in the coming weeks.

More importantly, it is becoming apparent that FHA loans may be returning to the forefront of the mortgage industry. The well-publicized problems in the news centering on subprime lenders and the fallout of subprime loans means that many potential homeowners who have less-than-perfect credit will be looking for an alternative lending instrument in the future. Many experts believe that we will see a re-emergence of the HUD-backed FHA Loan Program because of this.

After being extremely popular even up until the 1990′s, FHA loans began to fall off as a common mortgage option because they (currently) require 3% down and are not easy to obtain. Since the government backs the loans, there is a reputation of FHA home loans having a lot ‘red tape’.

The recent fallout of the subprime market, combined with recent legislation that burned through the House but stalled in the Sentate, means FHA loans may once again rise to be anywhere from 10-25% of the mortgage industry. Many congressmen are currently stating that they are interested in passing legislation that will amend the FHA program to include no-money-down loans and also make it much easier for potential homeowners to obtain them.

Keep your eye out for more FHA news in the near future. In the meantime, if you’d like to learn more about FHA loans, visit our FHA section.

If a borrower decides that an FHA mortgage loan is right for them, there is a process that the FHA requires the borrower and the property to go through.  The borrower must have a credit check, and the FHA requires the property to have an appraisal.  Obviously, as the FHA insures the loan for the lender, if the borrower can no longer make mortgage payments, the FHA will get the house.  That being said, the most important function of the required FHA appraisal is that it is performed to protect the FHA against a house in bad condition and therefore lowered value.

Many homeowners who purchased their homes with FHA aid believe that the required appraisal constitutes some sort of warranty as to the value or condition of the appraised property.  The truth is that if a borrower discovers some sort of defect with their FHA mortgage loan property, the FHA will do nothing to repair it.  It is the borrower’s responsibility to order a home inspection to find out if the property has any major defects or is in bad condition.  Just remember – the FHA is indeed a mortgage insurer, but this fact does not protect you from problems in the house.

The FHA, or Federal Housing Administration, is a government program that was started during the depression to help affected citizens buy houses who might not have been otherwise able to afford them.  Since the 1960s, however, the FHA’s main purpose has been securing housing loans for low and moderate income individuals with bad credit or an inability to make a down payment.  The FHA does this by insuring the lenders who provide the money to the borrower, so that in the event the borrower cannot make the payments, the FHA will cover the loss.  It should be pointed out that the Federal Housing Administration is the only government agency that is completely financially self-sufficient: it operates at no cost to taxpayers.  Though the FHA has undoubtedly provided thousands of families with housing, the FHA market niche is decreasing.

FHA mortgage loans aren’t for everybody.  Though the standards of obtaining an FHA mortgage are lower than mortgages in the prime market, there are still requirements.  For one, an individual taking out an FHA mortgage must be able to put down 3% of the loan in cash.  Furthermore, the borrower’s credit rating can be blemished and imperfect, but the borrower cannot have had a foreclosure in the last 3 years.  As for loan limits, the FHA rates vary widely around the United States, so it’s best to check with your local lenders.  Some have claimed that the low FHA loan limits have caused their decline in the last decade, as the FHA loan limits are lower than traditional Freddie Mac or Fannie Mae loans.

If you can afford to make a 3% down payment in cash, and fit the rest of the requirements, then there is only one more thing to consider: would another type of mortgage suit your needs better?  The decline of FHA loans have been partially blamed on option adjustable rate mortgages and interest-only mortgages.  Check out all of your options in order to decide what would work best for you.  The FHA does do a credit check, obviously, so be prepared to deal with this process when applying for an FHA mortgage loan.