An FHA loan is a mortgage issued by FHA-approved lender and insured by the Federal Housing Administration (FHA). Designed for low-to-moderate-income borrowers, which require a lower minimum down payments and credit scores.

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FHA Loan Interest Rates in Colorado

Many people assume the FHA sets the interest rates for FHA loans in Colorado. But the FHA’s role is only to insure the loans for lenders. FHA-approved lenders set the rates based on the current market, along with other personal criteria.

What Determines FHA Loan Interest Rates in Colorado?

FHA lenders look at your personal qualifying factors. The less risk of default you pose, the lower the interest rate they’ll quote you. Lenders use risk-based pricing which means the higher your chances of default, the higher the interest rates lenders charge.

To get the best interest rates, lenders look for:

  • High credit scores – The higher your credit score the better, as this demonstrates a lower risk
  • Low debt-to-income ratios – The lower your DTI, the more money you have to pay your mortgage, which lowers your risk
  • Attractive loan types – ARM loans have a higher risk of default than fixed-rate loans because of their volatility

I work with many Colorado FHA lenders, each of which offers different interest rates. I’ll work closely with you and the lenders to secure the best FHA loan interest rate possible for your loan.

Purchase Qualifier Refinance Rate Checker

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