Non-Financial Factors That Affect Home Loan Interest Rates
December 30, 2024
One factor is occupancy type. For FHA loans, this is straightforward because these loans require owner occupancy. Investment properties aren't eligible. While conventional loans may have different rates for primary residences, second homes, and investment properties, this isn't a concern with FHA loans.
Some might not immediately know which loan is best for them, but knowing the occupancy requirement ahead of time can help them make a more informed choice.
Your employment history is another factor. A stable job with consistent income shows lenders you're reliable and can make your mortgage payments. They'll look at how long you've been employed, your income stability, and your industry. Building a strong employment profile can help you get a better interest rate if the lender feels that history shows you are a good credit risk.
The loan term and payoff schedule also play a role. The loan term affects your monthly payments and total interest costs.
The amortization schedule determines how your payments are applied to principal and interest over time. Your lender may offer different interest rates for a 15-year loan compared to a 30-year mortgage, for example.
Standard amortization has early payments mostly going toward interest, while graduated payment mortgages have payments that start lower and increase over time.
Your income projections and financial goals will influence your choice of amortization schedule, and your lender may offer different interest rates for different loan terms and amortization schedules.
Remember, lenders consider various factors when determining your FHA loan interest rate. Understanding these factors can help you make informed decisions and potentially secure a lower rate.
FHA Loan Articles
December 9, 2024The Federal Housing Administration (FHA) helps people buy homes, especially those buying for the first time or who might not have perfect credit. In 2025, there is good news for FHA borrowers. FHA home loan limits are going up.
In most places, the FHA loan limit for a single-family home in 2025 is $524,225. This is more than it was in 2024. However, in expensive areas, where houses cost more, the limit can be as high as $1,209,750.
December 5, 2024The Federal Housing Administration (FHA) has some ground rules regarding cash-out refinances. These rules are designed to protect both you and the lender, ensuring you have enough ownership of your home and reducing the risk of foreclosure. How long must you own your home before you can apply for FHA cash-out refinancing?
December 4, 2024When you think about owning a farm, do you dream of vast landscapes and thriving agricultural enterprises? Or are you looking for a quaint farm-style house to live in but not necessarily to start a new farming career?
Borrowers who want to buy a farm residence are in luck with the FHA loan program, which includes options to purchase farm residences.
November 27, 2024If you are new to the home loan process, you may wonder how your loan officer will interpret your application data. How lenient is the lender with issues related to debt, credit utilization, and related factors? We examine some key points, but remember that what follows is not financial advice. Always consult a finance or tax professional for the most current information.
November 26, 2024
Thinking about buying a home? One of the first things you'll want to consider doing is filling out forms to be pre-approved for your FHA mortgage. This means a lender takes a look at your finances to figure out how much they're willing to loan you. It's a smart move, but you might be wondering: "Will applying for pre-approval hurt my credit score?"
