- Mortgage borrowing limits are the same in all Alabama counties.
- If you take out a matching mortgage, you can borrow up to $647,200
- FHA borrowers can get a mortgage of up to $420,680
If you are looking to buy a home in Alabama, it is important to know how much you can borrow. If your budget is high, your country’s borrowing limits will help you decide what type of mortgage you can get.
Alabama mortgage borrowing limits are the same in every county in 2022: $647,200 for matching mortgages and $420,680 for FHA mortgages.
How do mortgage borrowing limits work?
Most types of mortgages have limits on how much you can borrow. To match mortgages, these limits are set by Federal Housing Finance Agency. FHA Mortgage Boundaries are determined by Federal Housing Administration.
In 2022, the baseline matching mortgage The maximum is $647,200. However, in high-cost areas, you may be able to get a mortgage that matches more than that, since the FHFA sets different limits for areas where median home values tend to exceed the basic limit. In these places, matching limits can be as high as $970.800.
FHA mortgage limits work similarly. In 2022, borrowers in low-cost areas can get FHA mortgages of up to $420,680, while borrowers in high-cost areas can get FHA mortgages of up to $970,800.
If you want to buy a home that costs more than the matching mortgage limit in your county, you’ll need to get a hefty mortgage. The maximum amount you can get on a mega mortgage loan will vary from lender to lender. Some will loan up to $2 or $3 million, while others will lend much larger amounts.
Keep in mind that borrowing limits are the maximum amount an individual can borrow. Your lender will determine how much they think you can repay, and will not lend you more than that, even if that number is below your county’s borrowing limit.
Borrowing limits in Alabama in 2022 by county
How do you decide what type of mortgage is best for you?
Although the amount you plan to borrow will play a role in helping you decide which is which Mortgage type Should you get it, you first need to understand what you might be able to qualify for.
If you have
From at least 620, you may be able to qualify for a matching mortgage. These are mortgages that meet the FHFA Conforming Loan Limit Guidelines and are eligible for purchase by Fannie Mae or Freddie Mac, the two government-sponsored and FHFA-supervised institutions.
These mortgages allow for a down payment of up to 3%. If you take less than 20% on a matching mortgage, you’ll pay mortgage insurance until you reach 20% of your home’s equity.
FHA loans are good options for low-income borrowers or those whose credit prevents them from obtaining a matching mortgage. Typically requires a credit score of at least 580 and a
3.5% at least. If you make a larger down payment, you may be able to get one of these mortgages with a score as low as 500.
FHA loans require borrowers to pay an upfront mortgage insurance premium and an annual mortgage insurance premium. Unlike matching mortgages, FHA mortgage insurance does not disappear once you reach 20% of the equity in your home; You will usually pay this cost each month for the life of the loan.
If you’re buying a home that costs more than your county’s matching borrowing limit, you’ll need to get a hefty mortgage. The requirements for these mortgages will vary from one lender to another, but you will often need a credit score of at least 680 and a 10% to 20% down payment to qualify.
If you qualify, you may also want to explore your VA and USDA mortgage options. VA Loans Available to service members or veterans who meet the minimum service requirements. Some living couples may also qualify. USDA Mortgages Available to low to middle income borrowers in rural and some suburban areas. VA and USDA loans have no limits on borrowing.