FHA Mortgage Rates : Approaching 3.00 Percent

The Federal Housing Administration is a government agency, created in 1934. It serves three primary purposes : (1) That is, to improve housing standards related to home-loans, (2) To stabilize the mortgage market, whatever that means and (3) To insure mortgage loans, which means actually backed by the taxpayer.

It is important to remember that the FHA claims that they do not make loans directly. For example, it doesn’t lend money to home buyers or give money for a refinance type of loan. Rather, the FHA insures the loans that mortgage lenders make, again remember the tax payer exemption, so long as those loans meet the FHA’s minimal mortgage home loan guidelines.

FHA purchase mortgage guidelines are similar to conventional mortgage guidelines :

Annual income is verified with W-2 statements and tax returns. Remember, no more STATED or NINA loans
Monthly debts are verified via a credit report and personal statements. No more bank account statements showing cash flow deposits
Employment and assets are verified prior to closing

However, the FHA tends to be more easy with respect to who gets approved. The FHA will often insure the reason-ability test on loans that Fannie Mae or Freddie Mac turn down as a matter of policy, and it does so without charging high mortgage rates.

FHA mortgage rates have been under 4 percent since January 2012.

           When it comes to real estate, the myth is that when the music stops, home owners stay put. The traditional myth in regards to real estate is that prices do not go down because when prices get soft, home owners just stay put. That is, homeowners would be unwilling to sell their residence at a discount because this is their “home”. However, this traditional idea is being turned upside down in Florida because so many property owners were speculators. Florida, possibly more so than any other state has had rampant real estate speculators buying multiple investment properties in Miami, Fort Lauderdale, Orlando and other coastal locations. Property in Port Charlotte , on the western portion of the pan handle which has seen a significant rise in the last two years alone is down 5%-10% from recent highs. Now however, the music appears to have stopped. And what is so worrisome is that appraisers are having a much harder time finding comparable recent sales within a 1 mile radius of the subject property. Even worse, foreclosures in the area are now being included as comparables which are pushing down the values even further. It is not uncommon to see property depreciation of 15%-20% in Broward, Miami-Dade, and Palm Beach counties in the south where speculation was most feverish. Polk county, Charlotte and Osceola in the middle of the state are beginning to see softeness as well. And we fully expect to see further depreciation all throughout the state. The coast is littered with unfinished developments and cranes are everywhere as far as the eye can see. We would not expect a correction until at least 2009.