FHA loans are government-backed mortgages funded by the Federal Housing Authority that seek to support low-moderate income households. Because of more lenient eligibility standards, it’s much easier to qualify for FHA loans compared to other types of mortgages offered in the market.
Borrowers of FHA loans benefit for sufficiently lower down payment requirements and lenders are protected by possible loan defaulters.
In 2018, the government announced new eligibility requirements for FHA loans. Borrowers can qualify for an FHA loans with a minimum credit score of just 580; the loan would cover 96.5% of the entire property value. The remaining 3.5% of the total property value will have to be paid by the borrower as down payment; this amount can be paid off as gift or a grant. In special circumstances, the housing authority will also accept credit scores between 500-579 but the borrower will then have to pay 10% of the total value as down payment.
There are different types of FHA loans borrowers can pick from. They can choose from loans for buying homes, financing refurbishment projects and for reverse mortgages.
Georgia FHA Loan Requirements:
- For an FHA loan application to go smoothly in the state of Georgia it’s better to have a middle-score of around 620; however the minimum requirement is a credit score of 580. In certain situations, credit scores of 500-579 will be accepted but they borrowers will be required to pay 10% of the total property value as down payment.
- Borrowers who have a credit score of 580 or higher will only have to pay 3.5% of the total properly value as down payment.
- The DTI (debt-to-income) ratio is also considered for FHA loans; the maximum allowed DTI is 43%. In certain cases a DTI of 50% can be accepted.
- All borrowers will have to present documentation that ensures that the property meets the safety and structural requirements of the state.
Georgia has 159 counties and each county has its own loan limitation. The FHA lending limits in Georgia depend on the type of housing you intend to buy and the cost of local housing in the area. The minimum limit for an FHA loan in the state of Georgia is $294,515 for a unit with a single bedroom.
The maximum loan limit for an FHA in the state of Georgia is $692,200 for a unit with 4 bedrooms.
All qualified applicants that have qualified for an FHA loan in Georgia will have to pay two types of MIPs (mortgage insurance premiums):
- 75% of the total value of the unit is up-front premium. The amount will be added to the total mortgage by the FHA.
- As part of the total mortgage payment, the borrower will need to make monthly payments. These premiums will be around 0.45% to 1.05% of the annual mortgage balance; the exact amount will depend on the loan amount, the duration of the mortgage and the LTV (loan to value ratio).
Benefits of getting an FHA loan in Georgia
With an FHA loan, first-time home buyers can purchase property even if they have a low credit score. The loan reduces the required down payments significantly allowing borrowers to purchase a house without paying a huge lump sum of money. Existing home owners who have an FHA loan have the option of applying for a cash-out refinance loan or picking streamlined finance options.
Those who wish to purchase property for refurbishments can apply via a 203k loan that merges the cost of the property with the cost of refurbishment into a single loan.
e-Finance Mortgage LLC offers financial services for both existing home owners and first-time buyers in Georgia. We prioritize your needs and provide you with initial and refinancing FHA loans at competitive rates.
Let us help you with your FHA loan application, contact us today!
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.