FHA mortgage interest rate depends on many factors. There is no
set rate. Banks send lenders and mortgage companies a rate sheet
daily, which tells them how much they will pay for each rate. You
can look at a rate sheet and see where the bank wants the rate to
be by how much they will pay the originator. The point where the
bank doesn't pay anything to the originator, is where the rate is
too low for the bank. The rate can be bought up or down by the
borrower paying points (a percentage of the total loan amount) to
the originator, but those points are added to the formula show you
what the effective or actual rate of your mortgage is. For example,
if you get a loan at 5% apr for 30 years, but you pay 3 points or
percentage points at origination, your actual rate is no longer 5%
apr. You have to take into account all the funds you pay to the
bank, the originator, the appraiser, the credit bureau etc. during
the life of the loan (from application through pay off). In
Florida, by law you will get a document at closing that shows you
exactly what your effective rate is. Before closing, your
originator should explain this to you and they must disclose any
fees they will receive from the bank. The best advice is to deal
with honest mortgage originators, do your homework and make sure
that they are reputable and check with the State to make sure they
have a clean history.
