Affordability starts with calculating your debt-to-income ratio, which compares monthly debts (student loans, car payments, credit cards) to gross income. Most lenders prefer your total DTI—including the new mortgage—to stay below 43%. From there, factor in property taxes, insurance, and HOA fees to arrive at a comfortable monthly payment you can sustain.
Pre-qualification is a quick estimate based on self-reported income and debts—no hard credit pull, so it’s purely informational. Pre-approval is more authoritative: you submit pay stubs, W-2s, bank statements and authorize a credit check. You’ll receive a conditional commitment letter stating the loan amount you qualify for, making your offer far stronger to sellers.
A 20% down payment on a conventional loan both lowers your monthly payment and avoids Private Mortgage Insurance (PMI). But FHA loans allow as little as 3.5% down, USDA and VA loans can be 0% down for qualified borrowers, and many local first-time buyer programs offer down-payment assistance grants. The right option depends on your income, credit, and program eligibility.
For a conventional loan, a minimum 620 credit score is typical; bump that above 680 and you’ll access the best rates. FHA loans accept scores down to 580 with 3.5% down, and some programs may go even lower. Always pull your credit report early to correct errors and pay down revolving balances, as even a 20-point boost can lower your rate by 0.25% or more.
Rates fluctuate daily based on the bond market and Fed policies. As of mid-2025, 30-year fixed rates are in the low to mid-6% range, but your personal rate depends on your credit score, loan-to-value ratio, and the specific loan program. Locking in your rate when it’s favorable can shield you from market swings while you shop for a home.
Expect 2–5% of the purchase price in closing costs, covering lender fees (origination, underwriting), third-party fees (appraisal, title, recording), pre-paid items (taxes, insurance escrow), and any prepaid interest. You can negotiate seller concessions to cover a portion, roll certain costs into the loan, or shop around for the best service fees.
Private Mortgage Insurance guards the lender if you default and is required when down payment is under 20% on conventional loans. You can avoid PMI by:
DTI is your recurring monthly debt divided by gross income. Front-end DTI covers housing costs only (usually < 28%), back-end includes all debts (ideally < 43%). Improving DTI can mean paying down balances, increasing income (bonuses, part-time work), or choosing a longer term to lower payments.
Yes! Georgia Housing Finance Authority (GHFA) offers competitive rates and down-payment assistance up to 4% for qualified first-time buyers. Many counties (Fulton, DeKalb, Gwinnett) and cities supplement with local grant programs. Combine state and local aid to reduce out-of-pocket costs.