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Check your FHA loan eligibility

Many home buyers qualify for FHA — they just don’t know it yet. Check with a lender to verify your eligibility and find out how much house you can afford via the FHA mortgage program. You can get started below.

Do all FHA loans have the same interest rates?

No. FHA loan rates are not set by the government, and they are not consistent from one FHA loan to the next. FHA-approved lenders get to set their own mortgage rates, and some may have more affordable pricing than others. In addition, rates can vary by borrower, with the lowest rates often going to the ‘safest’ borrowers, and higher rates going to borrowers with lower credit and other risky loan characteristics.

What is the interest rate on an FHA loan?

FHA mortgage rates are often lower than rates for conventional mortgages. However, a lower interest rate does not always equate to a lower monthly payment. FHA mortgage insurance will increase your payments and the overall cost of the loan, even if the base rate is lower than for other loan types. Looking at annual percentage rate (APR) can be helpful in determining the ‘true’ cost of a loan, since APR accounts for fees as well as interest.

Can closing costs be included on an FHA loan?

Typically, the only closing cost that can be included in an FHA loan is the upfront mortgage insurance premium (upfront MIP). Most other closing costs will need to be paid out of pocket when purchasing a home or using the FHA Streamline Refinance program.

Do FHA loans have higher monthly payments?

That depends. FHA loans require mortgage insurance, which will increase your monthly mortgage payments. But so do conventional loans with less than 20% down. The cheaper loan for you will depend on your down payment and credit score; if you have great credit and 5% down or more, a conventional loan will likely have lower monthly payments. But if you have low credit and 3-3.5% down, the PMI on a conventional loan could be more expensive than FHA MIP. Talk to a lender to compare payment amounts and find out which loan is best for you.