President Trump started his career in real estate, and many people believed that this would lead him to make wise decisions that would ultimately benefit both home buyers and sellers. The administration’s very first move in the real estate market has caused FHA mortgage applications to drop 3.2%, and many people are wondering if FHA loans are still worth it.
What Are FHA Loans?
An FHA loan is a mortgage loan offered by most traditional lenders and insured by the Federal Housing Administration. Because the loan is insured, lenders are often willing to extend FHA loans to borrowers who have less-than-perfect credit and who may be turned down for traditional mortgages. These loans come with low down payments and reasonable interest rates, but there’s one major caveat – borrowers must also pay for mortgage insurance, which protects their lenders if they should default on their loans. This insurance is a form of risk mitigation for lenders, and it has allowed millions of people to buy homes across the country.