General Mortgage Loan Info
Georgia offers homebuyers a wide range of options for financing your home purchase. If you put down less than 20%, then you will be required to have PMI (private mortgage insurance). When your home’s value increases by at least 20%, then most lenders will stop the PMI payments. PMI is determined by the size of your loan. To avoid PMI, you could take out a second loan that would essentially be your down payment. In Georgia, all PMI premiums and the mortgage interest are tax deductible.
You are entitled to receive a copy of the appraisal before closing, along with an estimate detailing all the costs of your loan and what you will need to bring to closing.
VA Loans in Georgia
A Georgia VA loan is made by private lenders but guaranteed by the Department of Veterans Affairs. The VA loan program also offers a $0 money-down benefit, which can help veterans who might not have the ability to bring a large down payment to the closing table. As of January 1, 2020, VA borrowers with their full VA loan entitlement are not restricted by VA loan limits. Thus, you can borrow as much as the lender is willing to lend you without having a down payment. If you do not have your full VA loan entitlement, then you will be bound by Georgia’s VA loan limits. Some VA buyers in Georgia may also be eligible for a property tax exemption if you meet one of the following conditions:
- If you are 100% disabled veteran, then you could qualify for a property tax exemption of up to $60,000 of your primary residence’s value, depending on the index rate, which is set by the Secretary of Veterans Affairs.
These loans have no mortgage insurance premiums, low closing costs, no prepayment penalty, and lower average interest rates. You can also reuse the program for veterans with entitlement remaining. Lenders set the credit score requirements, as the VA is not issuing the loan.
FHA Loans in Georgia
Georgia also offers FHA loans with a wide variety of loan limits, which are based on your county. To qualify for an FHA loan in Georgia, you must live in the home as your primary residence. You can also have a lower credit score and a smaller down payment to qualify. FHA loans will also require that you pay a monthly MIP (mortgage insurance premium). There is also a mortgage insurance premium that is due at closing, but it can be rolled into your loan. FHA loans allow you to get a low fixed interest rate and are an appealing option for first time homebuyers.
USDA Loans in Georgia
The USDA offers a program that allows you to purchase a home without any down payment. You can also finance your closing costs. The mortgage insurance, referred to as the “guarantee fee,” is typically lower than MIP insurance through the FHA. All USDA loans come with a fixed interest rate that will not adjust or fluctuate throughout the life of your loan. Another benefit is that you do not have to be a first-time home buyer.
However, to qualify, you must have a credit score of 620 or greater, meet the income limits, and the property must be in a rural area. You also have to use the property as your primary residence. There are no exact loan limits through the USDA program in Georgia, since the amount you can borrow will be based primarily on your debt-to-income ratio.