Articles Tagged With: ARM (Adjustable Rate Mortgage)

September 26, 2014

FHA Mortgage Rate News For The Week of September 22 2014

September has been a rough month for FHA mortgage loan rates–there’s been an upward trend fueled at least in part by the recent Fed policy statement, which many anticipated as a possible indicator of where rates might be headed (predicting investor reaction to an announcement that indicated a stronger or weaker economy). But this week, we saw rates moving lower–the best execution numbers haven’t really changed, but the downward trend is a welcome one. In many cases borrowers will see the lower moves reflected in closing costs rather than in actual lower interest rates, but if the downward movement continues we may well see FHA rates shift out of their current range of numbers and back into the lower best execution rate of 3.75%. The downward trend we saw this | more...

August 22, 2014

FHA Mortgage Rate News For Friday August 22 2014

By Joe Wallace

If you are looking for an FHA home loan, chances are good you are paying attention to the rise and fall of FHA mortgage rates. There are many reason why these rates can change day to day or week to week. One factor—economic data releases that suggests weakness in the economy. This data can influence rates and push them lower, or, conversely, when economic/jobs data indicates improvement, rates can and sometimes do move higher as a result. But other factors can push rates higher or lower, too. We found a good example of that recently–mortgage rates moving lower based on investor reaction to world headlines. Last Friday, mortgage rates hit their lowest levels in the last eight weeks or so. That drop in rates was attributed to how investors reacted | more...

August 15, 2012

FHA ARM Loans: Basic Rules For Interest Rates and Disclosure

By Joe Wallace

Did you know the FHA offers Adjustable Rate Mortgages (ARM loans) for qualified borrowers? These loans feature lower introductory rates for at least one year, with interest rate adjustments specified over a period of time agreed upon between the borrower and lender. FHA ARM loans may feature an introductory rate fixed for one year or up to as many as 10 years depending on the terms of the loan. When the introductory period is over, the loan’s interest rate may be adjusted between one and two interest rate points with an interest rate cap over the lifetime of the loan of up to six points, depending on the loan. According to FHA.gov, “The lender and borrower negotiate the initial interest rate and margin. The margin must be constant for the | more...

April 26, 2011

FHA Home Loan Interest Rates

By Joe Wallace

One of the most common misconceptions of the modern FHA loan program is that FHA or HUD is responsible for setting interest rates on the home loans insured by an FHA loan. It’s easy to understand why some might think that is true; the FHA does place limits on certain fees, how closing costs and down payments are paid and by whom. Why wouldn’t the FHA also regulate the interest rates of an FHA-insured mortgage? The FHA does regulate (but does not set) interest rates in some cases. Any FHA-insured adjustable rate mortgage, for example, has built-in limits on when the rates can be adjusted, and how often. There are even caps on how many percentage points may be changed over the lifetime of the variable rate loan. But what | more...

April 25, 2011

FHA Loans: Comparing Adjustable Rate Mortgages

By Joe Wallace

Some borrowers decide an adjustable rate mortgage is an option they’d like to look into. While there is a natural risk involved with adjustable rates–the interest rate can increase and raise the amount of monthly payments–borrowers who shop around and compare terms may be able to get into an adjustable rate mortgage that has more favorable terms. It’s a smart idea to go into an adjustable rate mortgage with the notion that you should refinance later into a fixed rate loan. The FHA streamline refinancing program has a way to do just that for those who have FHA ARM loans. Other refinancing options may be available for conventional-to-FHA loans, we’ll explore refinancing issues in another blog post. What should a borrower do to find the best adjustable rate mortgage? To | more...

February 18, 2011

FHA Loans: Important Details Of Adjustable Rate and Interest-Only Mortgages

By Bruce Reichstein

When a first-time home buyer is searching for a home to buy with an FHA guaranteed loan, the buyer isn't just shopping for a home--they're also shopping for a home loan. There are many options to choose from, one of which is the adjustable rate mortgage or ARM loan for short. Another is the interest-only mortgage loan, also known as an I-O mortgage. We

January 27, 2011

FHA ARM Loan Options

By Joe Wallace

First time home buyers interested in FHA loans are often directed to the HUD official page where they can explore options on FHA loans. Some of the FHA's "for more information" links point to the FDIC official site, which has information on interest-only mortgage loans and option-payment adjustable rate mortgages. The FHA still insures ARM loans, which some borrowers choose because the FHA version of an ARM loan is more tightly controlled than a conventional version or a convention sub-prime loan. Those who want to purchase a home but may still wrestle with budget issues in the early years of home ownership often look to ARM loans and/or interest only mortgages as an alternative.

November 30, 2010

FHA ARM Loan Basics

By Joe Wallace

The FHA offers an adjustable rate mortgage, also known as an FHA ARM loan. These loans offer an introductory interest rate which is subject to change after the initial fixed rate period. That period varies depending on the loan--there are hybrid ARM loans available that feature different periods--but once the introductory rate period has elapsed, the adjustable rate is subject to a cap that applies either year-to-year or over the lifetime of the FHA loan. The initial interest rate is often lower than the fixed rate of conventional home loans, which is why many people consider ARM loans even in spite of the fears generated by the housing crisis of 2008.

November 30, 2010

FHA Adjustable Rate Mortgages

By Joe Wallace

There are two basic types of mortgages new house hunters should know about when shopping for FHA home loans; fixed rate FHA mortgages and Adjustable Rate Mortgages or FHA ARM loans. The FHA Adjustable Rate Mortgage is exactly what its name implies--an FHA home loan with an interest rate that can be adjusted up or down according to FHA requirements, the market and other factors. Thanks to the 2008 housing crisis, many soon-to-be homeowners are skeptical about adjustable rate mortgages whether offered by the FHA or not; FHA adjustable rate terms are definitely more predictable in some ways than their conventional loan counterparts. One of the reasons for that predictability is the ARM interest rate adjustment cap imposed on the loan. The cap protects the buyer from large swings in | more...