A new year always brings about changes. Some of the largest changes that will affect the Atlanta real estate market in 2014 are the ones recently announced by the Federal Housing Administration (FHA) regarding FHA loans. Beginning Wednesday, Jan. 1, 2014, home loan amounts will decrease from $346,000 to $320,000 for the metro Atlanta area, which will be quite a substantial change for many buyers.
Due to this change in FHA loans, right now is the perfect time for metro Atlanta new home buyers to decide whether it makes more sense for them to secure an FHA loan or a conventional loan. There are several differences between the two types of loans, but the largest difference is the mortgage insurance requirements.
With a conventional home loan, buyers have to put more money down upfront as the minimum is five percent. However, this allows them to be more aggressive on the purchase price because the monthly loan payment will be lower. With a large down payment, the mortgage insurance is much less, which makes the monthly payment significantly less.
An FHA loan requires less money down when the home is purchased, but the mortgage insurance is for the lifetime of the loan. This means that with an FHA loan, the monthly payment will be higher.
Conventional loans are a great opportunity to ensure a lower monthly payment and know that the mortgage insurance will not be included in the payment throughout the lifetime of the loan.
So that the new FHA changes will not affect them, it is critical for buyers currently in the market for a new Atlanta home that are using an FHA loan to make sure their case number is pulled before the new year. For any questions on the FHA changes, FHA loans or conventional loans, contact Academy Mortgage by calling 404-713-8862 or visit www.AcademyMortgage.com.
Equal Housing Lender. (c)2013 Academy Mortgage License #3113. GA Lic. # 20505. This is not a commitment to lend. Academy Mortgage Atlanta: 5565 Glenridge Connector, Suite 400. Atlanta, GA 30342. Georgia Residential Mortgage Licensee.