An FHA mortgage is a “first-time home buyer’s mortgage”. It requires a much smaller down payment than conventional loans. Home buyers usually only have to put five percent down instead of the preferred twenty percent most lenders require. The amount that you can borrow usually has a maximum limit that can change on a yearly basis and can vary depending on where you live. Also, a high mortgage insurance premium and other upfront costs usually are characteristic of this type of loan. FHA mortgages are assumable, which means that a first time home buyer can take over the payments from a seller which can save a lot of money.