First Time Home Buyers, FHA Loans, & the "Mortgage Widget"

I was recently told I need to spice up my blog, put some pizazz in it with color pictures, etc. One of the things recommended was to put a "mortgage widget" on the side of the blog page. These are clever little pieces of "eye candy" that show the "average" interest rate for some of the loan options available nationwide. It got me thinking about several different issues.

First, is there really any such thing as an "average" mortgage? While the vast majority of homes have mortgages, and many of them have several common characteristics, there really just is no such thing as an "average" mortgage. Every homeowner has a very "specific" mortgage, and rates are influenced by dozens of different factors, such as credit score, loan to value ratio, amortization period, etc.

The second thing that came to my mind was all the Realtors who ask regularly ask me "what are rates today?" expecting a solid answer they can give a client who I have never met. I always answer in the same way; rates are up, or down from the last timethey asked. Many of these Realtors are frustrated with such an answer because they want to tell their buyer what the interest rate on their loan will be so they can calculate a potential payment. While I understand the motivation, the question "what are rates today?" is nearly the same as me asking "how much does a house cost today?" I would be met with a dumbfounded expression, followed by a long series of questions about what kind of a house, and where.

Finally, my thoughts wandered to the specificsof these "widgets." I've noticed that I never see one showing FHA Loans. They almost all are willing to tell me what the average FNMA 30 year fixed, or FHLMC 15 year are going for, but I never see anything showing FHA loan rates of any kind. FHA loans come in all the same flavors as the Conventional loans: 30 year fixed FHA, 5 year ARM FHA, 15 year Fixed FHA, etc. so whyis it that these "widgets" don't address FHA loans? Maybe it has something to do with the fact that FHA does not set the interest rate for their loans, leaving it to the investors, and the market. I'm sure if anyone was interested they could get the statistics for FHA loans just as easily as they can for Conventional though.

At any rate, if you are still with me at this point, you are willing to read through the flash, and look for the facts which is what I try to give everybody. It may not be flashy, but I would hope home buyers, and especially First Time Home Buyers in the Puyallup, and Pierce County area would be more interested in substance.

Ron Brown

FHA & VA Loan Specialist