The Georgia FHA mortgage has become the first choice for the majority of first-time homebuyers in Georgia. The Georgia FHA loan program offers several benefits, keeping in mind the budget constraints of most homeowners who are interested in buying their very first home.
Compared to most conventional mortgage loans, the FHA loan facilitates the buying process for the applicant. Additionally, the FHA loan involves a very low down payment, which makes it easier for homeowners to meet their budget constraints.
- Secure fixed interest rate– One of the biggest advantages of the FHA loan is the option of paying a fixed 15 or 30 year rate of interest. Compared to other traditional loans where the interests vary, the interest rate remains the same for the entire course of the loan. This period is usually for 30 years. Due to this provision, the borrower can plan out his fixed monthly installment in advance.
- Minimal down payment – The Federal government insures or backs FHA loans, therefore the borrower /applicant incurs very minimal charges during the process. FHA loans require a minimum 3.5% investment from the borrower. The loan does allow for the home seller to pay all closing costs, up to 6% which is generally enough to cover just about any home purchase.
- Easy to qualify – Prequalifying for a Georgia FHA loan is one of the simplest. Since it is the FHA that insures your house loan, the lenders and banks make it easy for anyone to qualify that meet the basic requirements. The main components of qualifying are credit and income/employment.
- Adjustable Rate Option – The FHA loan came into being keeping in mind the tight budget constraints of first-time homeowners. For this reason, the FHA has an adjustable-rate house loan, which entails a very low monthly payment and curiosity rate.
- There are no cash reserves required – Compared to most conventional loan programs, which make the Georgia FHA mortgage loan a very enticing option for Georgia first-time homeowners that have little money saved up.
- Higher Loan Limits – FHA now permits loan limits above $472,030 for all of GA.
First Time Buyers need to know what to expect before starting the FHA loan application process. Being prepared will always better your chances of successfully getting your FHA loan approved. Below we have listed some steps and things to consider –
Before application:
- Debt-to-income ratio
Careful analysis has to be done here. Lenders vary on precise amounts but a debt load that’s higher than 41 to 45 percent is risky for an FHA loan. You will need two years of consistent employment with no unexplainable gaps in employment. - Credit check
It’s usually the small things that can hurt your credit. Check your income, credit, as well as rent history that might show up on a credit report. Get everything on the up and up, aiming for a clean record. - Credit score
As of 2023, a credit score of 620 or better is needed for the 3.5% down payment FHA. If you came out of bankruptcy or foreclosure, you would need to have maintained perfect credit since then (4 years and 5 years respectively) regardless of your current credit score.
FHA Loan Application:
- Fill out the Buyer’s Information request which tells us what you have and what you need. This will allow the FHA loan specialist to contact you to discuss your goals. Later a full application will have to be filled out that detail everything about you, the borrower, which will be used in figuring out whether you’re eligible for a loan or otherwise. The rate and the terms of the loan will also be determined largely by the information in your application form, credit score, etc.
- In the event the application is preapproved, you will get the disclosure documents which are essentially initial loan documents that have all the minute details regarding the terms, interest rates, cost and payments of the loan.
- This has to be signed and returned along with other documents such as your bank statements, IDs, references, etc., for verification purposes. Usually, these documents are prepped and readied well before the loan application is submitted to the lender.
- The processor reviews all verifying documents and requests for missing or any additional documents from the borrower if need be.
- Upon completion, the documents are then submitted to the underwriter.
- The underwriter will send a Conditions List of additional missing items or documents to the buyer.
- Once the buyer completes the needed items on the list, it’s sent back to the lender for final approval. The closing date is then set.
Note: Once you are in contract on a home, the entire loan closing process takes about 3 weeks to a month. Questions? Please just call 904-810-2293 or just submit the Quick Request form on this page.