However, aside for the fact that a FHA government backed loan takes less money down to get int,o and is easier for a buyer to qualify, there is one very important reason why this type of loan is a great loan to have if you are the owner of a home. This reason is that a FHA loan can be assumed by a qualifying buyer. What exactly does this mean to you? Well interest rates today are insanely low. Everybody agrees that they will have to go up. Historically the average interest rate over the past three decades has ranged between six to eight per cent and to really have a strong economy will have to go back up to these levels.. And I have been around long enough to remember when rates were briefly at 17 per cent. Believe me that was not a fun time to be a Realtor.If you have a very low rate government backed loan on your home then if the market goes up-especially if rates go up and the housing market softens, then you actually may have a valuable asset. Ask yourself this, in a slow market with higher rates, if you are trying to sell a home that has an assumable FHA home and your neighbor is selling the exact same home, then all things other things being equal you then have a much more attractive bargain. Imagine if you will a real estate market where interest rates are around ten per cent. (Yes, it can happen.) And your home can be bought with its assumable four per cent mortgage. That would be a pretty sweet looking deal in any market.
So think twice before you get your new loan. Perhaps a FHA loan is a better investment in the long run. If you want to read more and go into the numbers involved here is link to a good article in the Washington Post from 2010. The information is still relevant to today's market.
