Buying a home can be an emotional roller coaster – excitement and stress at the same time. For most people, the stress is associated with the financial stuff. Enter mortgage lending. 

Getting a good mortgage rate is important, but there are many moving parts at play. There are also several types of mortgage loans out there. The process can get tricky fast.

Mortgage rates in Georgia

Whether you’re an experienced homebuyer with a firm grasp of the mortgage lending process or this is your first time buying a home, educating yourself will set you up for success. It also helps to have a knowledgeable partner in your corner. 

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We created this guide to help you understand the different types of mortgages and shed light on factors that impact rates. This resource will help you navigate the process and set you on the right track to find not just the best mortgage rates in Georgia, but the loan that’s right for you.

Types of Home Mortgages 

Starting your home-buying journey with sound financial decisions sets you up for long-term stability. This often begins with the mortgage loan, but there isn’t a one-size-fits-all option. 

Let’s break down the three most common mortgages: 

  • Conventional Loans
  • First-Time Homebuyer Loans (FHA)
  • VA Loans 

Each of these has unique characteristics, advantages, and limitations. Understanding the key differences will help you make informed decisions so you can secure the one that’s best for your needs. 

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Conventional Loans

This is one of the most common types of mortgages available. What sets conventional loans apart from the others is they’re not insured or backed by the government. 

What does this mean? Well, government-backed loans like FHA and VA loans provide a guarantee that a federal agency will cover part of the mortgage if the borrower defaults. 

Conventional loans, on the other hand, are issued by private lenders. They’re widely available and come with several advantages for families or individuals looking to buy a primary residence, investment property, or second home. 

Need-to-Knows:

  • Qualifications – Borrowers need a credit score of at least 620, verifiable income, a solid work history, and enough assets to cover the closing costs.
  • Down Payment – This can vary, but many conventional loans require a minimum of 5% down payment, higher than FHA or VA loans. Some lenders offer loans with down payments as low as 3% for first time buyers, but the borrower may have to pay for private mortgage insurance (PMI).
  • Interest Rates – Conventional loans can have higher interest rates than government-backed loans, but don’t require funding fees like FHA or VA loans. 
  • Flexible Loan Terms – Borrowers can choose from 15 or 30-year loans as well as adjustable-rate mortgages. 
  • Loan Limits – An attractive feature for those looking for an expensive home, conventional mortgages offer higher limits than government-backed loans. 

FHA Loan

If you’re a first-time homebuyer on a fixed budget, a Federal Housing Administration (FHA) loan can help give you your start without significant upfront costs. These highly accessible mortgage loans are insured by the government and issued by federally-approved lenders. 

Being a first-time homebuyer isn’t a condition for qualifying for an FHA loan. This type of financing is available to a wide range of borrowers, non-US citizens who hold permanent resident status, or individuals with valid work visas. 

Need-to-Knows:

  • Qualifications – Borrowers need a credit score of at least 580, much lower than conventional loans. Debt-to-income requirements are much more relaxed, making it easier for borrowers with higher debt obligations to get approved.
  • Down Payment – One of the more attractive features of FHA loans. Borrowers only need a down payment of 3.5% of the home price. 
  • Mortgage Insurance Premiums (MIPs) – Borrowers must pay upfront and annual MIPs. This is a premium that’s paid over the full term of the loan if the down payment is under 10%. 
  • Closing Costs – FHA loans allow for the use of gift funds to cover the closing costs. Gift funds are cash donations given to the borrower with no repayment requirement. 
  • Loan Limits – FHA loan limits are set by the Federal Housing Administration and the US Department of Housing and Urban Development (HUD). Limits vary based on the home prices in a given area. 
  • Interest Rates – The lender sets the interest rate, which is based on factors like the borrower’s credit history, down payment, and the current housing market. The FHA places caps on interest rates to protect homebuyers. 

VA Home Loan

If you’re a Veteran or active service member, a Veterans Affairs (VA) loan offers unique financial advantages. These cost-effective mortgage loans are insured by the US Department of Veterans Affairs and offer attractive conditions to qualified borrowers. 

 VA loans are exclusively available to:

  • Veterans who meet a minimum period of service requirement
  • Active-duty military personnel
  • National Guard or Reserve members with at least six years of service
  • Spouses of fallen service members
type of mortgages in georgia

VA loans allow borrowers to finance a home with absolutely no down payment. In addition, the loans don’t require private mortgage insurance, which means lower monthly payments.

Need-to-Knows:

  • Qualifications – A credit score of 580 is recommended for applicants. However, VA loans are quite lenient when it comes to credit scores and income requirements. 
  • Interest Rates – VA loans offer highly competitive interest rates. The VA guarantees a portion of the loan, which reduces the lender’s risk, thus bringing down mortgage rates in Georgia and beyond. 
  • Property Requirements – Borrowers can use a VA loan for single-family homes, condos, multi-unit buildings, manufactured homes, or construction projects. However, the property must be the borrower’s primary residence. 
  • No Repayment Penalties – Borrowers have the freedom to pay off their mortgage early without incurring penalties. 

Today's Georgia Mortgage Rates

30 Yr. Fixed 7.000% APR 7.491%
15 Yr. Fixed 6.375% APR 6.852%
30 Yr. Fixed FHA 6.000% APR 6.984%
30 Yr. Fixed VA 6.000% APR 6.461%
Mortgage Rates as of February, 22 2024 See All Rates | See Rate Assumptions

Compare Loans and Down Payments Today

When deciding on a loan that suits your situation, it’s important to analyze how they stack up against each other. The differences will likely affect your mortgage rate and down payment. 

Use our loan comparison tool to learn how much home you can afford and which loan is right for you. Simply select the property purchase price and down payment percentage to see which type of home loan you may qualify for. 

Factors that Impact Rates

Mortgage rates in Georgia and across the country change frequently due to a variety of factors that impact the pricing of Mortgage-Backed Securities (MBS). A mortgage-backed security is made by bundling many individual mortgages. These investment securities are actively traded by government lenders responding to economic events. 

Here’s how it works: 

  • Banks and mortgage lenders create mortgage loans to help homebuyers purchase property. 
  • These loans get packaged together based on things like loan terms and interest rates. 
  • The bundled loans are then turned into a Mortgage-Backed Security, of which shares are created and sold to investors working in the financial market.
  • When homeowners make their monthly mortgage payments, the money goes to the MBS holders. 

The movement of MBS pricing determines whether rates decrease or increase. A mix of uncontrollable elements influences these daily changes. Let’s take a closer look.  

Economy

The overall state of the economy is perhaps the number-one factor influencing mortgage rates in Georgia. Economic indicators like the unemployment rate, GDP growth, and inflation all play a role. 

In a robust economy, mortgage rates may rise due to an increased demand for loans. However, if there’s an economic downturn or an expectation of a recession, it can have a major impact on the mortgage rates. During these periods, central banks may lower rates to stimulate borrowing and spending, which impacts mortgage rates accordingly. 

Income

Your financial stability and income have a direct impact on mortgage rates. Lenders evaluate income to assess borrowers’ ability to make mortgage payments on time. 

A higher income often indicates a lower risk for lenders, which could result in a more favorable interest rate. On the other hand, low-income borrowers often see higher rates due to the increased risk.  

Property Type and Use 

The type of property you intend to finance is directly connected to your mortgage rate. Single-family homes, condominiums, and multi-unit properties carry varying levels of risk that can influence the interest rate offered by lenders.

The way you plan to use your property can also influence the interest rate on your mortgage. For example, loans for investment property often have higher rates than homes the borrower intends to reside in. 

Loan-to-Value (LTV) Ratio

The loan-to-value (LTV) ratio compares the loan amount to the appraised value of the property. A lower LTV ratio generally results in lower mortgage rates since it indicates less risk for the lender.

Credit Score

Your credit score can significantly impact your mortgage rate. A higher credit score instills more confidence that you can consistently make your monthly payments. 

A lower credit score, however, is seen as riskier in the eyes of lenders. This can result in higher rates or stricter loan terms.

Loan Features

The interest rate on your mortgage can be directly influenced by loan features such as: 

  • Type of loan (fixed rate or adjustable rate) 
  • Loan term
  • Whether it’s government-backed
  • Loan amount 

Mortgage points are another aspect to consider. They involve paying fees to the lender during closing in exchange for a reduced interest rate. Opting to pay points upfront can lead to a lower interest rate, ultimately reducing the overall cost of your mortgage in the long run. 

Finally, local housing market conditions are key factors that affect the availability and affordability of mortgage rates. For instance, supply and demand dynamics within the housing market can influence mortgage rates in Georgia. When there’s a surplus of homes, lenders tend to compete for borrowers by offering lower rates. This is known as a buyer’s market.

Check out current mortgage rates.

Tips on Finding the Best Mortgage Rates in Georgia

Securing a desirable rate involves planning and making well-informed decisions. Here are some useful tips to help you navigate this journey.

Organize Your Finances

If the state of your finances is healthy, you have a better chance of securing an attractive mortgage rate. Fortunately, there are some things you can do to maximize your financial standing before applying for a loan.

Start by reducing existing debt. The less debt you have, the better chance you’ll have of getting a good rate. It’ll also increase your loan eligibility. 

Improving your credit score is also helpful. Lenders consider it a significant factor when determining interest rates. Simple actions like paying bills on time and managing credit responsibly will contribute to a good credit score.

Save for the Down Payment

This is a beneficial step in the mortgage process. A larger down payment reduces the amount you need to borrow. It also demonstrates to lenders that you’re ready to start with a significant investment in the property. 

Putting a larger amount down can result in lower interest rates and better loan terms. In addition, saving for the down payment demonstrates financial responsibility and enhances your ability to negotiate with lenders.

Collaborate With a Mortgage Lender in Georgia 

Understanding the dynamics of the state’s housing market is crucial for securing the best mortgage rates in Georgia. Working with local lenders offers advantages over national-level counterparts. 

Local professionals possess a knowledge of the market and stay up to date with the latest trends. They can also leverage valuable connections within the local real estate community.

Moreover, local mortgage lenders in Georgia go beyond the one-size-fits-all approach often employed by national-level lenders. They take into consideration your qualifications, customizing their approach to secure the mortgage deal that aligns with your specific requirements. Providing personalized advice on how to position yourself for good rates, local lenders offer guidance that extends well beyond the pre-approval process.

Some mortgage lenders provide approvals, also known as approval guarantees. This takes pre-approval a step further by offering a commitment from the lender. Conditional approvals can offer advantages when dealing with financing clauses in real estate contracts. They also help build trust among sellers and make the transaction process smoother.

The Takeaway

By managing your finances, saving for a down payment, and working with a local lender who understands the intricacies of the housing market, you increase your chances of securing mortgage rates in Georgia that suit your needs.

Find the Best Mortgage Rates in Georgia

If you are seeking a mortgage to buy property in Georgia, try our easy-to-use mortgage calculator. It accounts for all variables including taxes and insurance charges. 

You can also get an online customized rate quote based on your unique information. Simply follow the steps by entering information about what you’re looking for and we’ll show you the best rates. You can then pick a program that’s most suited to your needs and speak to a licensed mortgage advisor when you are ready.

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