Don't assume - compare FHA lender mortgage rates and closing costs.
It is important to compare FHA lender mortgage rates and closing costs, because each lender will have different terms and conditions, and mortgage interest rates may vary considerably.
The FHA does not make loans itself – if this were the case, there would be one standard loan for FHA mortgages. Rather, the FHA insures loans made by private lenders.
Therefore, the first step in obtaining an FHA loan is to contact several lenders and/or mortgage brokers and ask them if they originate FHA loans. As each lender sets its own rates and terms, comparison shopping is important in this market.
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In some cases, an intermediary organisation can obtain a range of quotes for you from different lenders, which saves you the time and effort of shopping around to all the different lenders yourself – and saves you from filling out many forms with the same financial information over and over!
When you compare FHA lender mortgage rates and closing costs, remember that a better mortgage interest rate can be offset by high closing costs or ongoing account-keeping fees. Similarly, you may find that a mortgage which offers very low costs to set up actually costs a lot more in the long term, because the mortgage interest rate is higher.
Also be careful to check whether the mortgage rates you are being quoted are for fixed or adjustible mortgages. An adjustible mortgage will almost always have a lower interest rate than a fixed mortgage at the time that you make the decision. However, if mortgage interest rates are likely to rise – as they are right now – you can quickly find your adjustible rate mortgage becoming much more expensive than the comparable fixed rate mortgage would be.
Do not simply accept the first offer you receive from an FHA lender – compare FHA lender mortgage rates and closing costs between several lenders to ensure that you are choosing the right FHA mortgage for your situation.
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