Back when I started selling Logan real estate four years ago, conventional loans were the way to go. Nearly all the loans my buyers got were conventional loans whether they had money to put down or not. There were loan combination’s 80/20’s, 80/10’s, even 80/15/5’s where borrowers could get the prime interest rate on the first loan while getting a smaller second, and sometimes third loan at a higher interest rate. Well, those days are a thing of the past.
According to the REALTORS® Confidence Index, 39% of home buyers this year have gotten FHA home loans. These are loans insured by the Federal Housing Administration. Currently they require just a 3.5% down payment, which makes them easier to get, and more affordable than most conventional loans for home buyers who don’t have a large down payment.
Home buyers, and people refinancing their mortgage loans are also seeing an increase in the number of 15 year fixed home loans. According to Wells Fargo, during November 15 year fixed loan originations were up 55%. One of the reasons more people are going with the 15 year mortgage is because interest rates are SO low right now, they are nearly as affordable as 30 year mortgages are when interest rates are normal.