15 Year: 3.25%
5 Year: 2.75%
FHA 30 Year: 3.75%
What Is An FHA Loan?
The Federal Housing Administration (FHA) controls the government home loan insurance program and lets first time home buyers who might not normally qualify for a loan obtain a quality and manageable loan. Basically, FHA takes responsibility for insuring the loans instead of the traditional lenders who may view the borrowers as to risky to provide a loan to. FHA assumes the risk for the lender and in exchange for FHA assuming the risk the lender will provide a loan to the borrower. It is important to note that FHA is a part of HUD (housing and urban development) and has been empowered by them to provide this very important FHA service.
The most obvious advantage for borrowers using the FHA service is the reduced credit requirements. Potential borrowers face a less stringent credit analysis as compared to Conventional Loans which are sold to the secondary market. FHA loans are also assumable. The loan can be transferred to another party without the usually outlays of monies associated with getting a loan.
It is important to mention that FHA loans are not just for first time home buyers. You can obtain an FHA loan for your first home and second, third, … . Also a borrower who does not have an FHA loan can opt to change their loan into an FHA loan.