Based on 2022 research, Georgia has an average home value of $323,935. That’s a 19.4% increase in value from the previous year. While the value of homes in Georgia has appreciated in recent years, price growth still remains below the national average by roughly $33,654.
Purchasing a home is a serious commitment since it usually involves taking out a mortgage that is repayable over several years. MoneyGeek’s guide can help you make a well-informed decision, as we’ve outlined recommendations and steps to find the best property and financing for your needs.
On average, Georgia has a home value of $323,935, slightly below the U.S. average home cost of $357,589.
Homebuyers typically need to make a minimum down payment of 20% for a mortgage loan, although some mortgage types require no down payment at all.
To purchase a home in Georgia, identify the best location, determine mortgage costs, get pre-approved by a lender, inspect the home and then close the loan.
Choose an Ideal Location
Where your property is located in Georgia will significantly affect its value. For instance, the average home value in Danville is $71,511, while the average home value in Atlanta is $399,127. Several factors contribute to a rise in property costs within a neighborhood. These include the cost of living, general culture and availability of social amenities. Considering these factors in your search can help you identify the best place to buy a home in Georgia.
Working with a real estate agent will make it more likely that you’ll find the ideal property for your budget and lifestyle preferences. The agent will not only allow you to sample various offers on the local home market but will also offer you expert homebuying information and guide you through the entire process.
Remember, not all real estate agents are created equal. It’s important to find one that’s trustworthy, reliable and knowledgeable about market conditions.
MoneyGeek recommends using the following tips to find the best real estate agent for you:
- Ask trusted friends or family for referrals
- Verify your agent’s license and experience
- Read reviews from previous homebuyers
- Select an agent that is highly knowledgeable about the local market
- Compare rates with others to ensure they’re reasonable
The cost of living varies considerably in Georgia based on where you live. For example, according to our research, the average cost of living in Savannah is 9% less than Atlanta. Typically, you should select a place whose cost of living does not exceed your income level.
Some items that contribute to the cost of living in a locality include:
You can easily compare costs in different areas using MoneyGeek’s cost of living calculator.
Georgia has a lower average home value compared to other places in the United States. Homebuyers looking for affordable property may consider comparing costs across the cheapest neighborhoods in the state.
While suburban areas offer more affordable housing options than cities, you may encounter tradeoffs, like reduced access to social amenities or health services. That’s why buyers need to weigh property costs against their lifestyle preferences when choosing where to purchase their home.
Historically, Fitzgerald, Danville and Americus offer some of the most affordable housing options in Georgia. However, they may not have the amenities you’re looking for in your home city.
Calculate Mortgage Rates
Understanding the mortgage types available in Georgia can help you choose one with the best rates while purchasing a home. Each mortgage type features different terms and rates, so it’s important to understand the differences between them to identify the one that best fits your situation and needs.
Mortgage rates also vary by lender. Shopping around and comparing multiple offers from different lenders will help you get the most ideal terms and conditions.
Aside from your credit score and income, your mortgage rate also depends on the type of loan you select. Mostly, conventional loans attract higher interest than government-backed loans.
On average, you will pay the following average interest rates on a mortgage loan in Georgia:
- Conventional home loans: 5.3–7.0 %
- VA loans: 5.6–5.9%
- USDA loans: 3.25%
- FHA loans: 5.0–5.3%
Mortgage loan interests also change based on the loan term and amount. Eligibility requirements are also unique to each loan type. You can only qualify for a VA loan, for instance, if you are a veteran or active military member.
Calculating your approximate monthly mortgage payment will help you know if you’re able to make consistent premium payments. Our mortgage calculator makes this easy by estimating your monthly payment using factors like interest rate and principal loan amount, among others.
MoneyGeek also allows you to compare rates between conventional and FHA loans to determine which option best suits your profile since you may qualify for both.
Compare mortgage types and lenders for features like APR, loan limits, repayment terms and application costs to find the best mortgage for your needs.
To determine your eligibility for a mortgage, as well as your mortgage terms, lenders evaluate your financial history. Some additional factors that may also determine your loan amount and APR rate include the following:
- Down payment: The more you put down up front for your loan, the lower your monthly mortgage payments will be.
- Credit score: Homebuyers with excellent credit scores receive lower interest rates and higher loan limits than those with bad credit.
- Income: Lenders assess your income level to determine how likely you are to make repayments without defaulting.
- Debt-to-income ratio (DTI): Your debt-to-income ratio indicates the debt you currently have relative to your income. This helps lenders determine whether you can pay your monthly installments comfortably.
Prepare Down Payment Requirements
The total cost of your home loan includes the down payment amount. This is the first payment towards purchasing your home before receiving your mortgage funds. Depending on the mortgage type and lender you choose, your minimum required down payment will vary.
Before making any down payments, you need to understand your mortgage type. For instance, if you choose a zero-down-payment loan, such as a USDA or VA loan, you do not need to make any advance payments before your mortgage.
Zero-down-payment mortgages often feature more strict eligibility guidelines. For example, USDA loans are limited to individuals buying homes in eligible rural areas, while VA loans are limited to current and former members of the military.
With other types of loans, like conventional loans, you may also pay as little as 3.5% up to 20%. Your down payment will impact the amount you pay in interest rate and monthly payments; a large down payment typically translates to a lower interest rate and monthly payment amount. Because of this, it’s a significant consideration when applying for a mortgage and purchasing a home.
As you apply for a mortgage, you may also need to consider the insurance requirements associated with the loan. Most lenders ask you to buy private mortgage insurance (PMI) if your down payment is less than 20%, but this will also vary based on your credit score.
For FHA loans, you do not need to purchase PMI, but you may need a mortgage insurance premium (MIP). USDA and VA loans do not require any form of mortgage insurance. You may, however, require a guarantee fee on your USDA loan.
Mortgage insurance aims to protect the lender if a borrower fails to repay their loan. Because of this, you can reduce the amount you’ll pay in mortgage insurance by instilling confidence in the lender that you’re a capable and reliable borrower through a sound financial profile.
If you are a first-time home buyer wondering how to buy a house in Georgia, you should find out whether you qualify for a down payment assistance program. These programs are available to individuals who haven’t owned a house within the past three years and can help cover some of the costs of a down payment.
Some popular down payment assistance programs in Georgia are:
- Georgia Dream Homeownership Program: A service of the Georgia Department of Community Affairs, this program is available in select counties and offers eligible applicants a maximum of $7,500 as a 30-year mortgage. Eligibility depends on your household income and the cost of your preferred home.
- Homestretch Down Payment Assistance Program: Offered by the Gwinnett county government, the homestretch down payment assistance program also provides a maximum of $7,500 in funding in the form of a 5-year, zero-interest loan.
Additional down payment program information for Georgia home buyers is available at the United States Department of Housing and Development.
Get Pre-Approved for a Mortgage
Although you aren’t required to have a pre-approval letter to view a property in Georgia, some sellers may ask for it. Because of this, MoneyGeek recommends getting pre-approved for a mortgage first before shopping around for homes in Georgia.
A pre-approval shows the seller that the lender is committed to offering you a mortgage on specific terms outlined in the letter. It is not the same as prequalification, which only shows that you qualify for a loan.
Before applying for a loan, ensure that you have all the necessary documents and personal information to expedite the process. Lenders may ask for specific details about your credit history, income and existing debt.
Typically, lenders require the following documents and information:
- Social Security number
- Current pay stubs
- Tax returns with W-2s
- Bank statements
- Driver’s license
- Current debt information
Lenders may ask for other supporting documents during the application based on the details you provide for your loan. Ensure you have these documents ready to fast-track your homebuying process.
It may take up to 10 days to get pre-approved for a mortgage by your lender. It is essential to note the expiration date indicated on your pre-approval letter so that you compile the necessary documents within this time frame.
Typically pre-approval letters are valid for 30 to 90 days, so you should only request one if you’re confident you’ll purchase a home during this period. The letter provides details about your mortgage eligibility, including the approved loan amount. If your letter expires before you complete the purchase process, you may need to apply for another one.
After a lender conducts a credit check and establishes that you qualify for a mortgage, you will receive a pre-approval letter indicating that you qualify for a loan based on the lender’s outlined terms. A pre-approval letter confirms to the seller that you can finance the purchase of their property through a mortgage.
It’s possible to obtain pre-approval letters from multiple financial institutions based on your profile. While there is no limit to the number of pre-approvals you may receive, your credit score will be negatively impacted each time you apply since lenders conduct a hard inquiry on your credit information. Generally, each approval is valid for 30 to 90 days.
Conduct a Home Inspection
A home inspection is essential during the homebuying process since it helps identify crucial issues with the property, including pending repairs or safety concerns. Ignoring this stage may result in homebuyers spending more on repairs than they had budgeted for.
Some lenders in Georgia will ask you that you have the property inspected before they finance your mortgage.
It’s important to only choose a licensed home inspector. A professional inspector will not only assess a home for repairs and upgrades but will also offer guidance based on the findings of their investigation.
A typical inspection process should include an assessment of the following parts of the home:
- The foundation and basement
- Interior and exterior
- Power and electrical systems
- Windows and doors
- Plumbing system
Georgia’s State Properties Commission has a facility inspection checklist form that home inspectors can use to assess potential homes on behalf of buyers. While sellers may require a standard inspection of your home for mortgage approval, you may also want to complete additional more specialized inspections to ensure the property is free from risks.
Professional home inspectors often prepare a report based on their assessment and may, depending on your agreement, provide expert guidance on the repairs and upgrades required. In Georgia, inspectors do not need to have a license from the state. However, inspection guidelines may also vary at the county level, so you should consult your real estate agent for guidance about the local requirements.
Mortgage lenders conduct appraisals to determine the dollar value of a home before committing to financing it. The process involves the valuation of the property by a licensed appraiser. In some cases, the appraisal value may differ from the seller’s price.
Appraisals also help the lender determine whether you are overborrowing since the home may be repossessed in the future if you aren’t able to repay your mortgage. A standard appraisal takes into account the structure of the home, as well as the market trend for similar properties in the area.
The Georgia Real Estate Commission facilitates the review and management of appraisers in Georgia.
Close Your Mortgage Loan
Once your home is appraised, you will receive a loan offer from the lender outlining the terms of your mortgage. It’s important to thoroughly review the offer details before closing your mortgage. Mortgage loans often feature application fees that must be paid at this stage. To help cover the cost of these expenses, down payment assistance programs in Georgia may offer some relief.
Most of the paperwork for your mortgage is completed at this stage. Some documents that you will need to sign include the final loan application form, property deed, closing disclosure and mortgage fine print, as follows:
- Mortgage note: This document outlines the features of your mortgage loan including the amount and repayment guidelines. It legally binds you to the loan agreement.
- Property deed: The property deed contains details of the property and proves the transfer of ownership from the seller.
- Final loan application: After ensuring that the loan application form has the right information, you can sign it and return it to the lender.
- Closing disclosure: This disclosure provides additional details about your loan and must be returned to the lender within a stipulated duration.
It is recommended that you discuss any unclear loan terms with the lender before signing the documents.
Depending on the lender, loan terms and the location of your future home, you may incur closing expenses ranging from 2% to 5% of its total cost.
Standard costs across lenders in Georgia often include:
- Title search costs: You will incur some charges to conduct a title search to confirm that the property is in the correct name.
- Escrow: An escrow account helps you manage homeowners insurance, mortgage insurance and property tax payments.
- Appraisal costs: While instructions to conduct a home appraisal come from the lender, it is the responsibility of the home buyer to pay for the costs associated with this crucial process.
- Inspection fees: Hiring a professional home inspector also adds expenses to your closing fees.
- Legal fees: If an attorney is involved in transferring the property to your name, you may need to pay their fees.
- Origination fee: This does not apply to all loans, although some lenders will ask you to pay a percentage of your mortgage as origination fees.
Purchasing a home can be tedious if you do not follow the correct procedure. With MoneyGeek’s outlined purchase process, you can easily make informed decisions, from selecting the best place to buy a home in Georgia to closing the deal and ensuring the property is in your name.
After confirming the ideal location of your property, you’ll want to estimate your mortgage rate and down payment amount. You will then conduct an inspection of the home, followed by a property appraisal.
Buying a home is a significant investment of both your time and money. It’s important to be aware that the homebuying process doesn’t stop once you’ve closed your mortgage; to be a successful homeowner, you should make timely payments and manage your budget responsibly.
Georgia Homebuying Details
Georgia’s average home value is slightly lower than the national average. However, aside from the actual home value, you may need to consider its location and factors like the cost of living and the availability of social amenities.
The state has conventional and government-supported mortgage loan types. If you cannot afford your down payment, you may opt for a down payment assistance program to cover part of the cost.
Mortgage requirements vary between lenders. Additionally, homebuying regulations may also differ from state to state. If you are unsure of the guidelines in your location, you may contact a real estate agent for assistance. You may also visit the Georgia Department of Revenue to check out tax laws that apply to each county.
To see if you qualify for down payment assistance in Georgia, you should review the eligibility requirements for both the Georgia Dream Homeowner Program and the Homestretch Down Payment Assistance Program.
To tabulate the total cost of purchasing your home, also consider the expenses associated with living in your ideal neighborhood. You can use MoneyGeek’s cost of living calculator to compare figures across counties in Georgia.
While choosing a mortgage loan in Georgia, you need to be careful not to exceed conforming limits for your location. While conventional loan rates remain the same across the state, FHA loans differ for each county.
Unlike other states, sellers do not need to complete a disclosure statement for buyers in Georgia. All they need to do is give you clear information about the property. Because of this, it’s very important that the property is inspected by a licensed inspector.
Buyers in Georgia need to engage a real estate attorney to facilitate the closure of the homebuying process.
Frequently Asked Questions About Buying a Home in Georgia
Buying a house is a huge commitment that may have serious financial consequences if you do not plan accordingly and follow the right process. MoneyGeek provided answers to some of the most frequently asked questions about homebuying in Georgia to ensure you find the best option for your profile.
- Zillow. "Georgia Home Prices & Home Values." Accessed October 20, 2022.
- U.S. Department of Agriculture. "Single Family Housing Direct Loans in Georgia." Accessed October 21, 2022.
- Zillow. "Compare Today’s Mortgage Rates in Georgia." Accessed October 21, 2022.
- U.S. Department of Agriculture. "Eligibility." Accessed October 21, 2022.
- Realtor. "How Long is Mortgage Pre-approval Good For?." Accessed October 21, 2022.