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Review current fha mortgage rates for August 21, 2017 and get personalized mortgage quotes from top lenders
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Mortgage Rate ReportMonday, August 21, 2017
Mortgage rates continued their winning streak, remaining steady for the fourth consecutive week following the Federal Reserve's decision to leave interest rates unchanged at its July meeting. The Fed pointed to low inflation as a counterbalance to an improved labor market as well as expanding household spending and business investment in its decision to maintain the target range for the federal funds rate at 1.000% to 1.250%. Industry analysts had expected the Fed to stay put on interest rates at the July meeting so the decision has had relatively little impact on mortgage rates since the announcement. A strong jobs report to open August failed to move rates higher as expected and instead key mortgage rates remained flat on the week and continue to hover near their low point for 2017.
The interest rate for a 30 year fixed rate mortgage held steady at 3.625% and jumbo mortgage rates also remained flat at 3.750%, while other mortgage programs followed suit. The interest rate for a 15 year mortgage stayed put at 2.875% and the interest rate on a 5/1 adjustable rate mortgage (ARM) held at 2.750%, as lenders attempt to pull borrowers into shorter-term mortgage programs. VA mortgage rates remained at 3.250%, matching FHA mortgage rates which were also steady at 3.250%, with both programs remaining enticing for home buyers seeking low or no down payment loan options. Non-owner occupied mortgage rates were the sole mover on the week, dipping 0.125% to 3.750%.
After a turbulent first quarter of 2017, mortgage rates were relatively steady and attractive for much of the the second quarter. As we move deeper into the third quarter, the Federal Reserve's decision to hold interest rates at their current level further stabilized the mortgage market. Another week of flat rates means we are approaching multiple months of relatively stable and low mortgage rates that have brought increased certainty to the marketplace for both borrowers and lenders.
Despite the relatively steady current mortgage market, mortgage rates remain highly challenging to predict. The Fed’s decision to leave rates unchanged at its July meeting only bolsters the likelihood that the Fed will raise rates at a future meeting in 2017. In fact, the Fed reaffirmed its outlook for another rate increase in 2017 and recent strong labor and economic reports, including a decline in the unemployment rate and robust jobs growth, reinforce the potential for a future rate hike. Additionally, a Fed official recently reiterated the Federal Reserve's intention to raise interest rates before year end despite continued low inflation. Prospective borrowers looking to buy a home or refinance their mortgage may be able to lock in a lower interest rate by acting sooner rather than later, before mortgage rates increase, potentially at an accelerated pace.
Because interest rates change daily, we continue to actively monitor the mortgage market for changes. Borrowers should check the FREEandCLEAR mortgage rate tables regularly to review customized, updated mortgage rates for lenders in their area. Our rate tables are free to use and require no personal information.
Why Select an FHA Mortgage
Low Down Payment.
The main benefit of the FHA mortgage program is that it enables borrowers to buy a home with a down payment as low as 3.5% of the property purchase price. This compares to 10% - 20% down payment required to buy a home with most conventional mortgage programs. Borrowers can also combine the FHA program with a down payment assistance program or closing cost grant to further reduce the personal financial contribution they are required to make to buy a home. The FHA program charges borrowers additional up-front and ongoing fees but makes home ownership more attainable, especially for low-to-moderate income borrowers. The low down payment requirement also makes the FHA program an attractive financing option for first-time buyers.
Low Interest Rate.
The interest rate for an FHA mortgage is typically .125% - .500% lower than the current interest rate on a conventional loan or other low / no down payment mortgage programs. This is because borrowers are required to pay an ongoing FHA Mortgage Insurance Premium (MIP) which is similar to private mortgage insurance and protects the lender against default or foreclosure. The FHA MIP is an extra ongoing cost for borrowers but the insurance enables lenders to offer lower rates on FHA loans. Borrowers should consider both the interest rate and FHA MIP when evaluating the total cost of the loan.
Flexible Borrower Qualification Requirements.
The borrower qualification requirements for the FHA mortgage program are more flexible than for other low or no down payment mortgage programs. For example, the program typically requires that borrowers have a minimum credit score of only 580 and there are cases where a borrower can obtain an FHA mortgage with a lower score. Additionally, lenders have more discretion when applying debt-to-income ratios to determine what size mortgage borrowers can afford. The higher the debt-to-income ratio, the larger the mortgage the borrower can afford.
Available to All Borrowers.
The FHA mortgage program is available to all borrowers that qualify. There are no borrower income limits although there are limits on loan amounts available through the program. Additionally, the program applies to all eligible properties, up to four units in size, as long as the borrower occupies the property.
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More FREEandCLEAR Mortgage Resources
Use our FHA Mortgage Qualification Calculator to determine what size FHA loan you can afford as well as the required up-front and ongoing FHA Mortgage Insurance Premium
Review our comprehensive overview of the FHA Mortgage Program including borrower eligibility requirements
We provide a thorough summary of multiple mortgage programs that enable borrowers to buy a home with little or no down payment
Ask the FREEandCLEAR Mortgage Expert about the FHA mortgage program or any mortgage topic and receive an insightful response within 24 hours