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FHA intrest rates

Hello:
 I realize that interest rates are still reasonably low. However I have seen an increase in the past couple of weeks. My husband and I have entered into a contract on our first home and we are anxious to see what happens. I am hesitant to pay a fee to lock in at 6 when the rates have recently been at 5. Does anyone know a good indicator on what the rates will do next? We are set to close on July 31. Should we wait and risk it going up even more? 6 Percent will make the monthly payments more difficult for us. Does anyone have a sign it might go back down? Thanks for the advice.
  • June 11 2009 - Birmingham
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Answers (10)

There is no one that can truely determine which way rates will go in the coming days.  If you are willing to gamble and float your rate, you have to undestand the original rate you were quoted is not guaranteed.  It is a  major risk to play the market in attempts to get a lower interest rate.  If it is a make or break in affordability for you then by all means you HAVE to float.  If you can afford the payment based on a slightly higher rate now, take it and apply for a rate-reduction once rates come back down IF they do.  I hope this helps...
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  • June 11 2009
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What is today's rate???
  • June 11 2009
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rates have come back a little this morning.  ask your lender if he has a free float down policy where if the market rate drops, so does your rate. 6% sounds a little high
  • June 11 2009
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Wait a week or two, and you can pay a fee, to lock in at 6.5%. These are literally chaotic times. The only certainty is volatility. Those who have consumed the "4.5% interest rate" cool aid, along with the "buy now" cool aid, are now having toxic reactions to the mixture.

Lock or walk. Wait and see is treacherous.
  • June 11 2009
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Hi - I am in Connecticut. Can someone help me with a FHA loan in lower 5%. I am interested to get it locked asap. thanks!!
  • June 11 2009
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I have a great guy in Birmingham that does everything inhouse and the last 2 loans he closed for me where at 5% just got off the phone with him and rates are up a little but not that much.  Also his fees are alot cheaper.  Around $500 for Underwriting,processing,tax cert,Flood,Credit report. Most shops charge that much for processing. 

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  • June 11 2009
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God save us. I am also planning to bu a home and just when I got the mortgage approval before the long weekend and the next week we go to provide documentation, the rates are up. Lender suggested to wait for couple more weeks and then the rates are further up. God now we got a GFE for 5% and now its 6.3%. God save us and don't know how to continue further. Got all the inspections and have made a deposit of 3k. Can someone help me giving me some advice how to proceed further..I am a first time home buyer. Please help.
  • June 11 2009
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Nothing is indicating rates will be improving...having said that...nobody knows.  I think Bob's advice is solid...Lock if they improve streamline to 5%.
  • June 11 2009
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INDICATOR

I sympathize with your situation but as we do not have magic balls to predict what rates will do next, I did, however, come across this story which might be helpful.  You just need to click on the link.

Typically when people are investing in stocks, they are not purchasing bonds and rates usually go up.
  • June 11 2009
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There are no signs the rates will drop back down to 5%.  It is unfortunate your payments will be more difficult.  So, I would lock in since it will be even harder if they go up to 6.25 or 6.5...

The good thing about FHA is you can do a streamline refinance if the rates ever drop back down to the 5% range.
  • June 11 2009
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