Getting a Georgia mortgage can be confusing. To make it simple to understand, Georgia mortgage loans fall into (2) two main categories: 1. Government, 2. Conventional. Government mortgage loans include FHA loans (Federal Housing Administration), VA loans (Department of Veterans Affairs) and USDA loans backed by Rural Development (United States Department of Agriculture). All other Georgia mortgage programs are consideredconventional loans because they are not government guaranteed or insured.
When you apply for conventional Georgia mortgage terms and conditions of your mortgage must meet the funding criteria set Fannie Mae and Freddie Mac, in addition to the Fannie, Freddie minimum requirements the mortgage must mee your conventional Georgia mortgage lenders add-on minimum requirements. If your Georgia mortgage request does not meet these minimum Fannie, Freddie guidelines chances are your loan will not be approved. These two government-sponsored entities purchase conventional loans made by private Georgia mortgage lenders to establish Georgia mortgage backed securities that are then sold to investors. Depending on the Georgia conventional mortgage market conditions conventional mortgage loans average about 30-50% of the total market. These conventional mortgages may be fixed-rate or adjustable-rate mortgages. If your loan request does not meet the Georgia conventional lenders requirements your loan request may fit into a portfolio lenders guidelines.
There are several benefits to having a conventional mortgage. Because individual Georgia mortgage lenders and not the federal government set the fees and rates, conventional financing can often have both lower interest and fees. Additionally, Georgia mortgage lenders may allow borrowers to use other collateral as security other than the Georgia home being mortgaged. This is a particular benefit to Georgia mortgage applicants with limited access to credit.
For some Georgia mortgage applicants conventional financing may not be feasible. Conventional Georgia mortgage lenders generally require larger down payments and better credit ratings than government-backed lenders, making it difficult for many Georgia mortgage applicants who do not have a large down payment to qualify. Interest rates are also set by conventional Georgia mortgage lenders at times can exceed those of FHA and VA loans, both of which are government-backed. However, for the most part, Georgia mortgage interest rates for conventional loans and VA, FHA loans do not vary significantly, as they are both competing for your Georgia mortgage business.
Additionally, if the conventional mortgage has an LTV (loan-to-value) greater than 80 percent, the borrower is required to purchase Private Mortgage Insurance (PMI), which is paid monthly. This is not insurance for you – the homebuyer. This mortgage insurance for the Georgia mortgage lender in case the borrower defaults on the Georgia mortgage loan. Please note that once your LTV drops below 80 loan to value, you will also be able to drop the PMI, making conventional financing less expensive.
With all of these factors to consider, it is not easy to decide which type of Georgia mortgage is right for you. One of our Georgia mortgage professionals can fully assist you in making this decision. A Full mortgage application will help us determine what options are available to you. Once your full mortgage application is complete one of our Georgia mortgage professionals will review with you and discuss your options. Our loan officer show you how the costs break down compared with one another, allowing you to make an informed decision on your Georgia mortgage.