If you are reading this article, it's entirely possible that you are considering buying a home. It's also likely that you are weighing certain financial options between a sizable down payment or taking on the expense of mortgage insurance.
FHA loans are designed to help individuals take advantage of the benefits of home ownership, and these loans have low down payment requirements. However, for borrowers who choose to make a down payment that is less than 20 percent of the sales price, the borrower will be required to pay a mortgage insurance premium with the monthly mortgage payment.
This premium is in place to minimize the risk that the lender takes when making a low down payment loan, but it does result in a higher monthly mortgage payment for the homeowner. Recently, the FHA has announced a lower rate for FHA mortgage insurance premiums, and this can help home buyers save money.