Conventional Loans Georgia
Georgia is renowned for its vibrant fusion of modern energy and Southern charm. Whether you're drawn to the relaxed atmosphere of the coastal regions or the mountains of North Georgia, the experienced loan officers at District Lending can help you find the best conventional mortgage.
Conventional loans let you purchase a primary residence, investment property, or holiday home without the low purchase price limits typical for government loans. The conforming loan limit also lets you purchase homes in a variety of places. The average Georgia home costs about $355,500, and even the most competitive areas, such as Sandy Springs ($666,855), fall under the FHFA limit.
Conventional Loans in Georgia
With a median household income of $67,730, many homebuyers in Georgia have to rely on loans to purchase a home. As the typical home spends only 45 days on the market, it’s important to close the deal quickly, which is more likely to happen with a conventional mortgage loan than with loans insured by the federal government (for example, VA loans or FHA loans).
And as conventional mortgage loans aren’t insured by the government, they are riskier for the lenders and credit unions that offer them, meaning they have stricter requirements for borrowers. However, they still have more flexible mortgage terms and conditions, giving borrowers more choice.
Georgia Conventional Loan Requirements
In Georgia, conventional loan terms depend on a variety of financial circumstances. These include debt-to-income ratios, good credit history, income requirements, and other factors, as lenders need to see that the borrowers have the funds to keep up with their home loan payments.
A steady income, a credit score of 620 or above, and a down payment — which could be as little as 3% — are essential prerequisites in most cases.
Also, before you start applying, make sure you have the required paperwork ready. Include your most recent pay stubs, tax returns, W-2s for the last two years, and bank records.
We will look at the requirements in more detail below.
Down Payment
Typically, conventional mortgages require a minimum down payment ranging from 3% to 5%. The 3% payment is typically reserved for people with excellent credit scores and no issues in their credit history. While a 20% down payment is often mentioned as the ideal or typical, in reality, the average Georgian puts down 12.70% or $18,258 upfront. As a rule, a higher down payment comes with better mortgage rates and lower insurance.
In addition, Georgia has diverse down payment, closing fees, and second mortgage payment assistance programs, including:
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Georgia Dream
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Within Reach Program
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Community Home Investment Program (CHIP)
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Habitat for Humanity
Veterans, active military, public workers, and first-time homebuyers have additional benefits in some of these programs. There are also city-level and county-level programs available. If you have been in the military, it’s worth noting that there’s no down payment requirement for VA loans.
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Private Mortgage Insurance
Private mortgage insurance is necessary if your down payment is less than 20% of the home’s value, and it’s affected by the loan amount, credit score, and size of the down payment. However, PMI lets mortgage companies provide conventional loans to people who don’t have the financial ability to pay a lot upfront.
Unlike loans provided by the Federal Housing Administration, which require FHA mortgage insurance, or VA loans, which require funding fees, PMI can be avoided by paying 20% upfront or reaching the 20% equity mark with regular monthly payments.
Interest Rates
Georgia’s current conventional loan interest rates are a reflection of the state of the economy as a whole. Georgia’s mortgage interest rates peaked in October 2023 at 7.79%, the highest level in 23 years. While the interest rate has dropped since, it’s important to discuss your options with an experienced loan officer to see how the rates affect your potential monthly mortgage payment.
District Lending can help you choose between an adjustable-rate and a fixed-rate mortgage by looking at your financial history, circumstances, and goals.
Credit Score
The typical mortgage lender will require a minimum credit score of 620 for a conventional loan. However, scores in the mid-700s secure better rates, so lenders may be more willing to negotiate. Getting a conventional loan shouldn’t be a problem for the average Georgian, as they have a credit score of 695. If you want to save money on your future monthly payments, increase your credit score before applying for home financing.
Georgia Conventional Loan Limits
The Federal Housing Finance Agency (FHFA) sets these limits every year to determine the maximum amount for a conforming conventional loan in each county. In Georgia, the conforming loan maximum for a single-family home is $766,550 in all counties.
Conforming Loan Versus Non-Conforming Loan
Conventional loans can be classified as either conforming or non-conforming. Conforming loans follow the Federal Housing Finance Agency’s (FHFA) loan limitations. Jumbo loans, also known as non-conforming loans, surpass these limitations in order to serve purchasers of higher-priced real estate. That is, if a loan for a single-family residence in any Georgia county exceeds $766,550, it is referred to as a jumbo or non-conforming conventional loan.
Closing Costs
Title insurance, property taxes, and loan origination fees are commonly included in closing costs in Georgia. Typically amounting between 1 and 5% of the loan balance, these expenses have a substantial impact on the overall affordability of buying a home. If the average closing fees in Georgia for the buyer reach 1.4%, and the median home price is $355,500, that would bring the average buyer fees to $4977.
Personal Finances
To get a conventional loan in Georgia, you must manage your personal finances well and have a steady income. To determine your ability to make payments, lenders will ask that you provide paperwork to carefully review your bank statements, tax returns, and gross monthly income. The typical private lender will require a maximum debt-to-income ratio of 43% for most conventional loans.
Contact District Lending Today
Are you prepared to open the door to your ideal Georgian house? Get in touch with District Lending. Our committed staff provides personalized assistance to make sure you make the best home financing decision. Whether you’re a first-time buyer, upgrading, or looking for investment options, our all-inclusive support will make your journey easier. We are also here if you need a jumbo, USDA, FHA, or VA loan. Contact us now for a free quote, and together, we can make your dreams of owning a Georgia home come true.
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