Recently, there has been a boost in lending for real estate needs in the United States. Some people credit this increase to the Federal Housing Association and its reduced insurance fees.
The number of FHA-backed mortgages have increased this year. According to the American Banker in an article posted by Florida Realtors, observers also believe that the NHA could give the agency a competitive advantage in attracting first-time buyers who may have low credit scores.
“The number of FHA-endorsed purchase loans ballooned about 116 percent, to almost 80,000, from February to June, largely due to the 50-basis point decrease in its insurance premium to 1.35 percent in January. Meanwhile, the percentage of FHA loans to new homeowners has held steady at about 82 percent,” according to the American Banker.
720 is considered a “good” credit score by conventional mortgage companies. However, oftentimes, first-time buyers will not have a score this strong. Instead, buyers with a credit score lower than 720 seek out the FHA because it does not impose “loan level price adjustments,” like other conventional mortgage companies such as Fannie Mae and Freddie Mac.
“If you asked any housing or mortgage banking expert a year ago if they saw FHA doubling volume, I don’t think anyone would have said yes,” says Mortgage Bankers Association Chairman Bill Cosgrove.
Statistics clearly show that these FHA endorsed deals have increased. Year-over-year, ending in June, the FHA endorsements of single-family loans grew 85% to 128,495. Cosgrove says that this increase also indicates more first-time buyers entering the real estate market.
If you were worried about your credit score coming in the way of you and your Miami dream home, do not worry. Contact one of our expert agents and ask them about FHA backed mortgages.
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