How much of a down payment will you need for a Georgia home? Here’s what to expect
From 2020 to 2021 alone, the median sale price of a home grew 14.63% nationwide. Last year, it grew another 3.81%.
With home prices soaring, it is often difficult to determine the cost of a down payment to secure the sale.
Well, a recent study just found the cost of a median down payment by each U.S. state. In the Peach State, residents may be surprised at how much extra cash they’ll need to buy a home this year.
Let’s do the math:
How much does a home cost in Georgia?
According to a study by This Old House, the median cost for a home in Georgia is $371,000. The study got its data in November 2023 from Redfin.
Currently in Macon, there are three bedroom homes for sale that range from $140,000 all the way up to $675,000.
In Columbus, three bedroom homes range from $110,000 to $999,000.
How much money will you need for a down payment?
Now that we’ve established how much a home in Georgia costs, let’s talk about the median price of a down payment.
Home buyers typically need a down payment of 15% of the overall purchase price.
So, this means you’re looking at a down payment of around $55,000 for a Georgia home listed at the $371,000 median.
The study by This Old House assumed an 8% down payment for first-time home buyers and a 19% down payment for repeat home buyers.
In Georgia, this would mean a down payment of around $29,000 for first-timers and $70,000 for repeat buyers.
Are there other costs associated with buying a home?
In order to buy a home, you’ll need more than just a down payment at the closing table.
Buyers will also need to negotiate closing costs which can be anywhere from 3 to 5% of the loan amount.
In addition, some banks will want the first month or a few months of the mortgage up front as a buffer.
Tips for saving up for a down payment
If all this money talk has stressed you out, you’re not alone. Here are some tips from the American Bankers Association to stash away some cash:
Develop a budget: Calculate how much you need for your down payment. The down payment can range from 3.5% to 20% of the purchase price of a home, depending on your loan. Determine how much you’ll be able to save each month and how long it will take to save up your down payment. You can also identify spending areas where you can cut back.
Save in a separate account: Create a separate account to deposit your down payment savings. It reduces the temptation to take out that money if you’re tight on cash.
Research state and local home-buying programs: Several states have first-time home buyer assistance programs, as do some counties and local governments. The benefits of these programs include housing discounts and down payment loans or grants.
What questions do you have? Comment below or email me at cmadden@mcclatchy.com
This story was originally published February 16, 2024 at 7:00 AM.
