If you plan to buy your first home, don’t overlook the benefits of an FHA loan. The FHA mortgage loan program allows individuals to obtain a home loan backed by the federal government. This does not mean the government funds the loan, but it does provide a level of insurance that safeguards the investment. As a result, it is a less risky loan for mortgage lenders to take on. That creates several key opportunities for homeowners to save money.
Because these loans have federal backing to protect the lender, lenders can offer better rates. Generally, you will see lower interest rates and better overall term options on FHA loans than on traditional loans. And, a homebuyer may be able to assume the loan later if you decide to move, which can be a nice selling feature. For these reasons, if you have a plan to buy a home, you may want to consider the advantages of the FHA mortgage loan program.