5 Reasons Why Buying FHA Mortgage Leads Makes Sense

To understand just how buying FHA mortgage leads makes sense, one will first need to understand just what an FHA mortgage is, and the idea behind it. FHA loans are loans that are backed by the Federal Housing Administration, or FHA, through insurance in order to cover any losses should the borrower default on their mortgage. This is a concept that began during the 1930's in response to a rush of mortgage defaults, and it continues to be a popular option for those looking to become first-time homebuyers today.

The benefits of an FHA mortgage are the low down payment required, and the ability to qualify even if the borrower has less than stellar credit, allowing young homebuyers a way to purchase a home even if they haven't had time to build exceptional credit or save the large amount needed for the down payment on other mortgage options. For a down payment on an FHA mortgage, only a 3.5% down payment is required on average, and those who have experienced credit troubles may still find themselves able to be approved for their loan. Loan companies across the country are buying FHA leads at a higher volume this year, as credit standards have been eased.

There are several reasons why buying FHA mortgage leads makes sense, and the top 5 of these reasons are:

1. Higher qualification percentage – Because FHA mortgages are geared towards those who may have credit problems, may still need to build adequate credit, or have experienced delinquencies in the past, more homebuyers will be able to qualify for these types of mortgages. Because more will qualify, this will lead to being able to close on more interested leads.
2. Actively in search of a mortgage – Those who are searching for FHA mortgages are often those who are actively in search of a mortgage despite credit problems in the past, and they are proactively taking the steps to buy a home. For lenders, this translates into individuals who are already interested in the home buying process and are more likely to close on a mortgage they find suitable.
3. Insured homebuyers – Because FHA mortgages are insured and backed by the Federal Housing Administration, these are mortgages that are protected from defaults and foreclosures. Lenders in FHA mortgages will be able to cover any losses should the borrower default on their loan, so their investment is protected.
4. Low down payments – The low down payments associated with FHA mortgages allow homebuyers to close on their home more quickly, and this leads to faster closures for lenders as well. Rather than saving for years to acquire the average 20% down payment on a non-FHA mortgage, these homebuyers will be able to close rapidly with only 3.5% required, and this allows lenders to see a return faster.
5. Higher returns – The ability to qualify for an FHA mortgage, paired with the low down payment required on the loan, allows these types of leads to generate very high returns. Many lenders who have acquired FHA mortgage leads find that the returns on their lead investments will continue even years into the future.

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