TODAY’S INTEREST RATES
Mortgage rates have risen another .1% over the past 7 days, currently sitting near 1 month highs.
The average client can still get in the high 5%’s to mid 6%’s depending on how they want to structure costs.
FHA loans already start with lowering rates than conventional loans for most scenarios.
With FHA lowering their mortgage insurance premiums, an FHA loan has become often a better payment option than a conventional loan, especially for below 700 credit score borrowers.
If you would like to check the FHA loan limit for your county, you can call me
or go here: https://entp.hud.gov/idapp/html/hicostlook.cfm
Put in county name and the loan limit is next to FHA Forward.
REMOVING THE STIGMA OF FHA PREQUALIFICATIONS
In a conversation with a Top Realtor Group in Phoenix, the topic came up about listing agents preferring Conventional
Prequalification offers over FHA Prequalification offers.
There is often a connotation that an FHA client is not as well qualified and that the appraisal is more difficult / comes in with a lower value than a conventional appraisal.
Here is the real information:
- With FHA offering lowering initial rates and now lower mortgage insurance premiums than before, in many cases a borrower is getting a better payment on an FHA Loan vs. a Conventional Loan. Agents need to understand that going FHA is no longer because a client is not well qualified. I would make sure your lender (hopefully us 😊) is calling the listing agent on FHA offers and explaining this.
- FHA has their own panel of appraisals while Fannie Mae does not.
- FHA appraisers use the same way to determine a value.
- FHA appraisals have more focus on the safety and security of the home. Here are some of the main items an FHA appraiser will look at.
- No damage to the foundation, roof, or exterior
- Safe access to the premises
- Working utilities
- No exposed wiring or other electrical systems
- A permanent heating system that provides sufficient heat for the home
- No peeling or chipping lead-based paint. Homes built before 1979 use lead based paints.
- Access to clean water
- No termites or other wood-destroying insects
- Access to, and ventilation in, attics and crawlspaces
- No soil contaminants, such as from a damaged underground storage container
- No safety hazards, such as stairs without handrails
- Compliance with local zoning regulations
If the home is in good working condition, an agent/seller should not worry about taking an FHA Prequalification over a Conventional Prequalification.