FHA mortgage interest rates drop to new 12-month lows
(December 4, 2008) -- FHA mortgage interest rates are based on the bond market, not set by the government -- and in the past ten days the bond market has pushed FHA mortgage interest rates down by nearly one percent.
The impact of lower FHA mortgage interest rates on home buyers -- including those participating in HUD's $100 down payment program -- is that the same mortgage payment buys a larger home.
For example, if a home buyer was qualified for a mortgage payment of $1,350, with a 6.000% interest rate on his FHA loan, he could buy a home worth around $185,000. With a 5.125% interest rate, that same monthly payment would buy a home worth around $201,000.
FHA mortgage lenders reported surging activity levels in response to the new, lower interest rates, yet they have cautioned that interest rates change daily -- sometimes even multiple times during the course of one day -- so today's low rates may not last for long.
To see how much home you could qualify to buy, click here.