Did You Know?

FHA loans are one of the best options for young, first-time home buyers who have not had as much time to save for a large down payment or establish a high credit score.

Get an FHA Refinance Loan
Get an FHA Purchase Loan
FHALoan.com
Get an FHA Refinance Loan
Get an FHA Purchase Loan
Click to Start Your Refinance or Purchase Loan

What to Do About High Interest Rates?


What to Do About High Interest Rates?
Mortgage rates are hitting prospective homeowners hard this year and are approaching 8%, a rate that didn't seem very likely last winter. With so many people priced out of the market by the combination of high rates and a dwindling supply of homes. With fewer homes on the market because current owners don't want to sell, prices continue to rise.

Still, if you feel like you have to buy a home, there are things you can do to get the best rate possible and plan for more affordable times down the road.

Shop Around for the Best Rate
Mortgage rates can vary significantly between lenders. Take the time to shop around and compare rates and terms from different lenders. You can use online tools and consult with mortgage brokers to find the most competitive rates available.

Improve Your Credit Score
Your credit score has a significant impact on the interest rate you qualify for. Take steps to improve your credit score by paying bills on time, reducing outstanding debts, and addressing any errors on your credit report.

Consider a Shorter Loan Term
While shorter-term mortgages typically have higher monthly payments, they often come with lower interest rates. If you can afford the higher monthly payments, opting for a 15-year mortgage, for example, might save you money in the long run.

Lock in Your Rate
If you're in the process of buying a home and think rates will continue to climb, consider locking in your mortgage rate. This means that the lender guarantees you the current rate for a specific period, typically until you close on the home. It protects you from potential rate increases during that time.

Increase Your Down Payment
A larger down payment can help you qualify for a lower interest rate. Lenders often offer better terms to borrowers who can make a higher initial investment.

Consider Adjustable-Rate Mortgages (ARMs)
While fixed-rate mortgages offer stability, adjustable-rate mortgages (ARMs) can have lower initial interest rates. However, they come with the risk of rates increasing over time. ARMs may be a good choice if you plan to sell the property or refinance before the rate adjusts.

Evaluate Your Financial Situation
Assess your financial stability and future plans. If you anticipate higher income in the near future, you might be able to handle a higher rate. Conversely, if you expect financial difficulties, it's essential to secure a mortgage that you can comfortably afford.

Be Patient
Mortgage rates are influenced by various economic factors, and they can fluctuate. If rates are currently high, it might be wise to wait for a more favorable rate environment before making a home purchase.

------------------------------

RELATED VIDEOS:
Let's Talk About Home Equity
Understanding Your Loan Term
Your Home Loan is Called a Mortgage
See Your Credit Scores From All 3 Bureaus
See Your Credit Scores From All 3 Bureaus

FHA Loan Articles

Frequently Asked Questions About Home Insurance with an FHA Mortgage

When you buy a home with an FHA mortgage, you must pay for both mortgage insurance and insurance to protect your property while paying on the loan. There are important nuances to these insurance policies to know before you start. What's the difference between insurance against water damage and flood insurance? That's just one example of the "hidden" expenses of buying your new home to budget for.

Questions and Answers on Buying a Home with an FHA Mortgage

Buying a home with an FHA mortgage means you'll need to know the FHA guidelines about the types of properties you can purchase with an FHA single-family home loan for residential purposes. How well do you understand these rules? Are you truly ready to start house hunting? We examine some key aspects of the process.

How Much to Save for an FHA Home Loan Down Payment

FHA single-family home loans require a minimum 3.5% down payment for typical transactions. Saving for this requires planning and dedication, but it’s not impossible to save enough to make the down payment. How do people typically budget and save for this? Your financial needs and goals will play a big role in how much you decide to set aside for your new home, but here are some options to think about...

Beyond the Break-Even With FHA Discount Points

In a previous post, we discussed why FHA borrowers should carefully consider whether paying for discount points truly serves their best interests, focusing on factors like short-term homeownership, opportunity cost, FHA mortgage insurance, and the prevailing interest rate environment. Discount points are an option for borrowers willing to pay a fee to lower the interest rate by a set amount. This is not right for all borrowers, and you don't want to pay for points you won't benefit from during the loan term.

Should You Pay Extra to Lower Your FHA Loan Interest Rate?

Are you considering buying a home with an FHA loan? You'll likely talk to your participating lender about FHA loan "discount points" – fees you pay upfront for a lower interest rate on your mortgage. The idea behind discount points is a straightforward exchange: you spend money today to reduce your interest rate. Typically, one point equals one percent of your total FHA loan. In return, your interest rate might decrease by an amount you and the lender agree upon.

FHALoan.com is not a government agency. We do not offer or have any affiliation with loan modification, foreclosure prevention, payday loan, or short term loan services. Neither FHALoan.com nor its advertisers charge a fee or require anything other than a submission of qualifying information for comparison shopping ads. We do not ask users to surrender or transfer title. We do not ask users to bypass their lender. We encourage users to contact their lawyers, credit counselors, lenders, and housing counselors.

SecureRights Advertiser Contact Information