FHA insured mortgages are a great option for first time homebuyers who want to take advantage of today’s super low mortgage interest rates but have minimal cash on hand for a down payment.

FHA insured mortgages require a low 3.5% down payment which is helpful to many first time homebuyers. While conventional loans offer comparable loan down payment options, they typically require the borrower to have a higher credit score. With an FHA insured mortgage, borrowers are still required to have good credit, but can qualify with lower credit scores.

FHA insured mortgages came about during the Great Depression of the 1930’s when mortgage defaults and foreclosures rose sharply. The National Housing Act of 1934 created the Federal Housing Administration (FHA) which was established to increase home construction, reduce unemployment and operate various loan insurance programs. Sounds a little bit like the current environment, doesn’t it?

What is an FHA insured mortgage? It is a mortgage backed by the Federal Housing Administration mortgage insurance, which is provided by an FHA-approved lender. FHA does not make loans nor build homes.

The program was intended to provide lenders with sufficient insurance in the event of default. It also made homeownership more accessible to more people. Historically, they have allowed lower income Americans borrow money for a home purchase that they would not have otherwise been able to afford.

FHA insured mortgages offer competitive, and typically lower, mortgage interest rates than conventional loans.

Mortgage Interest Rates are always changing…everyday. If you are thinking of taking advantage of this “perfect storm” in real estate and mortgage interest rates visit my website, or contact me directly.