Wells
Fargo
Mortgage
Rates
FHA
Mortgage
Rates
State
Farm
Homeowners
Real
Estate
Notes
Home
Inspection
Tools
Current
Prime
Interest
Rate
Home Ownership Preparation :: Best Fixed Rate Mortgage
Best Fixed Rate Mortgage:
Finding the Best Mortgage with a Fixed Rate
Custom Search
The best fixed rate mortgage available to most first-time homeowners on a budget is the FHA Home Loan.
With no added points and a low interest rate, it offers incredible options for the first-time buyer along with support and financial counseling.
To learn more about why the FHA Home Loan may be the best fixed rate mortgage, how it works and the eligibility requirements, keep reading.
How the FHA Fixed Rate Home Loan Works
The FHA provides mortgage insurance for low-income home buyers or home buyers who do not have a substantial down payment readily available. By essentially securing the loan and insuring it against default, the FHA allows lenders to loan to buyers they wouldn’t normally approve.
It’s important to note that the FHA does not issue home loans. Instead, they work with and through lenders to offer the best fixed rate mortgage available – one with low interest rates and lower down payment requirements.
The fixed rate loan is also known as the 203(b) and it lets first time buyers finance up to 97% of the purchase price, meaning a 3% down payment is all that’s needed to buy a home.
This loan also allows 100% of the closing costs to be paid through a gift from a relative, nonprofit group or government agency.
Insurance on FHA Fixed Rate Mortgages
You are still responsible for paying mortgage insurance on an FHA 203(b) fixed rate home loan. These insurance payments are typically rolled into your monthly mortgage payments and equal out to roughly 0.5% of your total loan amount.
This is about half the price of private mortgage insurance on a standard mortgage – which is another reason why the FHA 203(b) is the best fixed rate mortgage available for first-time home buyers. You will save a significant amount of money on your mortgage insurance.
For example, 1% mortgage insurance on a $300,000 mortgage is $3000, but only $1500 at 0.5%. You also get to roll that insurance into your monthly payments rather than paying it in one installment.
Income Requirements for the FHA Fixed Rate Loan
You do not have to meet minimum income requirements to qualify for a FHA fixed rate home loan, but you will be subject to specified debt ratios for your area to avoid homeowners taking on homes they can’t afford.
Lending Limits
There are lending limits on FHA fixed rate mortgages and these will vary depending on your state and county. For example, a couple living in Manhattan can apply for a maximum loan of $729, 750 while a couple in Austin is only eligible up to a maximum mortgage of $271,050.
The FHA 203(b) fixed rate home loan may not be the best fixed rate mortgage for everyone, but it’s definitely the best option out there for the first time home buyer with a minimal down payment.
See also:
All Articles for Home Ownership Preparation
Custom Search
Only $9.95!!
Learn great tips about how to safely obtain a home mortgage with
Your First Mortgage
Order Online
24 Hours a Day
7 Days a Week
365 Days a Year!
Copyright 2008
Home-Ownership-Preparation.com :: Best Fixed Rate Mortgage