Home loans such as FHA loans, VA loans and USDA loans are all backed by government agencies. Loans guaranteed by government agencies are meant to help low-to-moderate income borrowers which have less than an average credit score and don’t have the required funds for the down payment.
These loans also have limits on how much money can be borrowed. Conventional home loans are any other type of home loan that is not guaranteed by government agencies; these are a better option for people with high incomes and high credit scores who wish to buy a house that exceeds the limits of government-backed loans.
e-Finance Mortgage LLC provides conventional loans with competitive rates and terms for people who wish to purchase a house in Georgia.
There are two main types of conventional mortgages; they are either conforming or non-conforming loans. In order to be classed as a conforming loan in Georgia, the mortgage needs to meet the criteria set by Fannie Mae or Freddie Mac. Only if the loan meets the criteria, will the loan be considered conforming and qualify for purchase by Fannie May or Freddie Mac.
Loans that fail to meet the requirements will be classed as non-conforming and are ineligible for purchase by these agencies. Eligibility is determined by the size of the loan; loans that are larger than $453,100 will not qualify for purchase.
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The limit increases depending on the cost of living in the area. For high cost areas, conforming loans can increase to $679,650.
In Georgia conventional loans, borrowers will be required to make a down payment of 20% or more. At a down payment of 20% or more, borrowers can avoid paying for private mortgage insurance (PMI).
In the last few years, loans are being offered with down payments as low as 3%. Those with lower down payments will likely still have to pay PMI alongside their loan but when 20% equity is attained borrowers can cancel their mortgage insurance. Note that this option is unavailable for loans backed by the government.
Georgia Fixed and Adjustable-Rate for Conventional Loan Options
Conventional loans come with either a fixed-rate, an adjustable-rate or a combination of both. Fixed and adjustable rates offer various benefits; borrowers will have to pick according to their specific needs and goals.
Fixed-rate mortgages provide borrowers with peace of mind and a sense of stability since the rate of the mortgage does not change through the person’s lifetime despite fluctuations in the property market. These are usually offered for 15yr, 20yr and 30yr durations.
In adjustable-rate loans (ARMs). The interest rate changes according to fluctuations in the property market. The good thing about them is that they always start off with lower interest rates than those offered by fixed-rate mortgages. Such loans are better options for home buyers who’re looking to refinance or relocate in the future.
At e-Finance Mortgage LLC we provide our clients with competitive rates and flexible terms on all our Georgia conventional loan options. If you wish to purchase your first home in Georgia or if you’re looking to refinance an existing mortgage, we’re here to help. We’ll customize a conventional loan so it best suits your needs.
Get in touch with us today for more information.