What Is an FHA Mortgage?
An FHA mortgage is a government-backed loan designed to help people with lower credit scores or smaller down payments buy a home. You can qualify with as little as 3.5% down and more flexible credit requirements, but you’ll have to pay for mortgage insurance for the life of the loan, which adds to your monthly cost. FHA loans are popular with first-time buyers who need a boost to qualify.
Who Is It Best For?
FHA loans are best for buyers with lower credit scores or limited savings for a down payment. If you’re a first-time homebuyer or someone rebuilding your credit, an FHA loan can make homeownership possible when a conventional loan might not. FHA loans do not tend to be the best options for people with good credit.
Who Should Think About It Twice?
If you can afford a larger down payment and qualify for a conventional loan, you may want to think twice about FHA. The mortgage insurance premiums can add up over time, making it more expensive than other options if you plan to stay in the home long term.
Pros and Cons
| Pros | Cons |
|---|---|
| Low down payment (as little as 3.5%) | Mortgage insurance required, adding cost |
| Easier credit score requirements | Loan limits may be lower than conventional |
| Great for first-time buyers | Can cost more long-term if you don’t refinance |
The mortgage rates displayed on this site are collected daily from publicly available sources provided by more than 400 lenders. Mortgage-Rates.ai does not receive compensation for listing these rates, and all rates are presented as published by the respective lenders. While every effort is made to ensure accuracy, the information may contain errors or omissions. Mortgage rates are highly dependent on an individual’s financial circumstances, credit profile, loan terms, and other factors. As such, the rates you are quoted directly by a lender may differ materially from the rates displayed here.
Users should contact lenders directly to obtain formal, binding loan offers. If you identify any discrepancies in the data or would like to have your institution’s rates included, please contact us at content@mortgage-rates.ai
All logos, trademarks, and brand names appearing on this website are the property of their respective owners.