How FHA Mortgage Rates Are Being Impacted by the Coronavirus
The Coronavirus is all anyone can talk about these days and it’s no different in the mortgage industry. In fact, the virus is making some serious changes to the way lenders issue loans in the first place while also putting a near halt on home sales. FHA mortgage rates are falling right alongside traditional mortgage rates and while this might seem like great news to prospective buyers, it’s not everything you could hope for.
Banks Are Changing Requirements
With FHA mortgage rates dropping to historic lows in response to the economic downturn, banks are trying to find a way to be more selective. This means re-examining their FHA loan requirements and qualifications, essentially decreasing the number of people who will qualify for a new home loan. The fewer people they have to lend to, the lower their risk is. While it’s helpful to the banks, it’s not helpful to prospective homebuyers.
Many lenders are increasing the minimum credit score requirements and down payment amounts they need to extend a loan to borrowers. If borrowers don’t meet those requirements, they won’t get offered a lower principal loan or a higher interest rate like they usually would. Instead, they may get denied entirely. This increase in application rejections can make it harder for people to get the financing they need to buy a home at all. That doesn’t mean it’s impossible. It just means you’ll have to work a bit harder to find a lender.
How You Can Take Advantage of Low Rates
The low FHA mortgage rates are something you need to take advantage of now if you’re planning on buying a house in the near future. This will help you lock in a low-interest loan, saving you thousands over the next 15 to 30 years. However, it does mean that you’ll want to shop around with different lenders to find the right one for your financial situation.
If one lender denies your application, don’t give up. Find ways to improve your credit score and boost your savings to make your financial situation look more attractive to lenders. Get quotes from different lenders and compare your options in detail before you start shopping for homes in the first place.
If you’re interested in taking advantage of low FHA mortgage rates or exploring your options, Mortgage Solutions Financial is here to help. Contact us today to speak with one of our experienced team members and let us help you find the right home loan.