The average sales price of a home in Georgia has been dropping steadily since June, according to the Georgia Association of Realtors. If you’re looking to buy a home in the Peach State, that should be music to your ears.
“Getting a great rate or a low price on a home are the best deciding factors for when it is a good time [for you] to buy a home,” says Dina Maeweather, a licensed real estate agent with Keller Williams. With home prices dropping, more sellers are also willing to help with closing costs, which can help homebuyers who might be short on funds to close.
Now could be a good time to rethink how much house you can afford. Mortgage rates have risen significantly this year, changing the math around buying a home. Don’t forget about homebuyer assistance programs, as these programs could help cover closing costs and down payments.
What Are Today’s Mortgage Rates in Georgia?
For Sunday, November 27, 2022, here are the current mortgage rates in Georgia. The average 30-year fixed mortgage rate is 6.720%. The average 30-year fixed mortgage refinance rate is 6.720%. Today, the average 15-year fixed mortgage rate is 6.060%.
This information is from Bankrate’s latest survey of the nation’s largest mortgage lenders.
Current Mortgage Rates in Georgia
How Much of a Mortgage Do You Need to Buy a Home in Georgia
Buying a home will require a down payment as a requirement of getting a mortgage loan. The down payment needed can be as low as 3% of the home’s purchase price and can vary based on your loan type.
Conventional loans can require as little as 3% down, but be aware that anything less than 20% will also come with the requirement to have private mortgage insurance added to the monthly mortgage payment. FHA loans are a popular alternative for those who may not qualify for a conventional loan, although they do require at least a slightly higher 3.5% down payment.
The median sales price in Georgia has now dropped for two consecutive months, from $359,945 in June to $345,000 in August. Because down payments are measured as a percentage of the sales price, this is great news for homebuyers as it reduces the amount of cash that is needed.
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Types of Home Loans Available in Georgia
In addition to having a choice of mortgage lenders, you may also be asked to choose the type of loan you’d like. Conventional loans, FHA loans, and VA loans are some of your choices, each with its own unique features, benefits, and requirements.
Conventional loans are the most popular type of mortgage and could give you more options as a buyer. They tend to have more flexible requirements when it comes to the condition of the home. Other loan programs could require repairs to be made, which could result in delays and additional expenses for both the buyer and seller.
Maeweather says she has seen many properties listed for sale that only allow for conventional financing. Without a conventional loan, “sellers get a little nervous about [buyers with] FHA loans due to the repairs that can be required to ensure the home meets FHA requirements.”
To qualify for a conventional loan, you’ll typically need at least a 3% down payment, a credit score of 620 or higher, and a debt-to-income ratio of 45% or less. However, many lenders use an automated system that reviews your application as a whole, so while uncommon, it is possible that your specific loan may have more stringent requirements.
FHA loans are insured by the Federal Housing Administration and could be a good option if you don’t meet the credit or income requirements of a conventional mortgage. FHA loans do require a slightly higher down payment of 3.5%, but allow a lower credit score of 580. And if you can manage a 10% down payment, the minimum credit score requirement drops to 500.
While FHA loans offer more flexibility in getting approved, be prepared to pay more in closing costs and other expenses. FHA loans have upfront mortgage insurance, which is on top of monthly mortgage insurance premiums that are added to your regular mortgage payment.
The Department of Veterans Affairs outlines who is eligible for a VA loan, and generally requires you to have qualifying military service. One of the biggest benefits of a VA loan is the fact that no down payment is required. VA loans also have no mortgage insurance.
The Department of Veterans Affairs does not specify any requirements for credit or income and instead leaves those up to each individual lender. For this reason, getting turned down for a loan by one lender means you could still be approved through another bank.
First-Time Homebuyer Programs in Georgia
Buying a home requires a lot of cash that’s needed to satisfy expenses for down payment and closing costs. Fortunately, there are first-time homebuyer programs that can help reduce or cover these expenses.
Here are some of the programs you could be eligible for here in the state of Georgia:
- Georgia Dream Homeownership Program: For eligible borrowers, this program could provide preferred pricing for mortgage interest rates, down payment, closing cost assistance, and homebuyer education.
- HOME Atlanta 4.0: This program offers eligible homebuyers an FHA or VA mortgage in addition to a 3.5% grant that can be used towards down payment and closing costs. For the FHA option, you’ll need to have a credit score of 660 and a debt-to-income ratio below 45%. For VA loans, you’ll need a score of 680 and a debt-to-income ratio below 50%.
- Perry Bolton Mortgage Assistance Program: Homebuyers purchasing a home in the Perry Bolton Tax Allocation District who meet income limits can qualify for up to $20,000 in financial assistance. This is also a loan that is fully forgiven after living in the property for five years.
- ATL Home Renovation Advantage: Eligible borrowers can receive $10,000 to be used toward the down payment or closing costs. The loan is fully forgiven after living in the home for five years, and requires borrowers to qualify for a loan with an Invest Atlanta participating lender. Borrowers must not have more than $25,000 in liquid assets, and must pay a program fee of $1,200.
- Intown Mortgage Assistance Program (IMAP): This program can provide $10,000 towards down payment and closing costs, a loan which is fully forgiven after living in the home for five years. Borrowers must qualify for a loan through an Invest Atlanta participating lender.
- Atlanta Affordable Homeownership Program (AAHOP): This program allows homebuyers to receive up to $20,000 toward down payment or closing costs. The amount of the loan will determine whether it is forgiven after five or ten years of living in the property. Borrowers must have less than $10,000 in liquid assets, have a credit score of 580, and a maximum debt-to-income ratio of 43%.
- Vine City Renaissance Initiative (VCRI): Homebuyers who meet income limits and plan to stay in the home for at least five years can qualify for $10,000 towards down payment and closing costs. The minimum credit score is determined by each individual participating lender, has a program fee of $1,000, and requires homebuyers to have less than $25,000 in liquid assets to qualify for assistance.
Many homebuyer programs offer financial assistance that do not require any repayment as long as you meet certain requirements, such as living in the home for a certain number of years.