What Determines Your FHA % Rate?

[Anonymous]

Anyone know what factors determine what interest rate you get with an FHA loan?  Since the program is not score driven, it is up to the lender originating the loan and it's up to us as consumers to find the lender with the best rate?   Does the content of your credit profile somewhat dictate your rate (i.e. number of baddies, old foreclosure or BK, etc)?

I'm asking because I was approved for an FHA rate of 6.25% last week (refinance from conventional to FHA) and I've seen other postings here and on CB of folks getting rates around 5.5% and 5.75%.  I'm trying to understand why my rate is 6.25% and of course my lender says, "we're giving you a great rate" ----- of course they would say that, they stand to make more money with a higher rate, right?

If I take the 6.25%, my payment (P&I) would be $1607.  At 5.75%, it would be $1523 - a difference of $84 per month, or $1008 per year.

Please share any feedback as my lender is telling me they are completing some "registration items" with the FHA and then we'll do the appraisal, and close a week later.

[Anonymous]

Just like conventional loans, rates are driven my economic factors. That is why there are lock ins. For you to be quoted the 6%, that is of that day. No one knows when it will rise or fall. Its all a gamble.

[Anonymous]

Thanks for the reply, but that part I knew.    I was referring to the factors that might give Borrower A a rate of 6.25% versus Borrower B that got 5.75%, within a week of each other?

Here's the quote from my lender in response to my questions about rates and rate changes.

"If rates were to drop dramatically (by .5%) then we would be able to take advantage.  FHA rates move much slower than conventional rates and the compressions for rate hits are not concurrent with those in conventional financing.  The rates on FHA loans have increased and the compressions decreased thus making the rate hits associated with less than perfect scenarios about the same."

Shane? Or any can anyone here in the mortgage biz interpret this for me?  :-)

[Anonymous]

Okay, I really don't know much about this, but when I've asked my broker about the FHA rates (to determine how much we can afford and how much we can get approved for), he said that within a few days, it changes from 5.5 to 5.75 to 6.00--- even within one week. 

[luvs2barre]

I've heard that FHA vary by region. But Shane would know best. Hopefully he can respond soon.

[Anonymous]

bump......

Can anyone share their FHA % rate for a loan approved in the last week or two, or are going to be closing within the next couple of weeks?  If you would also list the state you're closing in and the amount of the loan, that would be helpful for comparison purposes.

My FHA Refi Loan

$261,000

6.25%

Texas

Closing 4/15/08

[OneDay800]

30 Year FHA Fixed Loan

$318,000

6.00%

New Jersey

Closing: 4/18/2008

Message Edited by OneDay800 on 04-02-2008 08:53 AM

[Anonymous]

FHA 30 year fixed

200k 6.35% Arizona

[Anonymous]

FHA loan thru Countrywide

30 yrs @ 6.5%

$317,000

closed 12/27/2007

monthly payment INCLUDING escrow is $2553

[Anonymous]

Excuseme, would you please tell me what is FHA ? can I refinance my motgage with FHA?