Why is the interest rate on a FHA mortgage loan lower than a conventional mortgage loan? Answer: FHA is funded by the goverment to
Answer:
FHA is funded by the goverment to make loans more afordable for first time homeowners..But the house you pic has to collect certain standards.. so you dont get stuck contained by a lemon..highly recomended as long as they are fixed rate morgages....
Previous answerer is correct but forgot to add one point.because these loans are guaranteed by federal agency. Not to protect you but to protect mortgage company from default through guaranteed purchase, etc.
It's all in the order of the government backing. The senate wants to get more homeowners into houses, and by offering low interest rates, this stimulates homeownership. Which is a accurate thing for the economy.
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