Common mortgage mistakes to avoid in Georgia include neglecting credit checks, skipping pre-approval, and overlooking closing costs. Avoid big purchases before closing, and always compare lenders. Understand loan types, property taxes, and insurance. Preparation and research are crucial for a smooth home-buying process. Mistakes here can cost you thousands, delay your closing, or even stop you from buying the home you love. And the worst part? A lot of these mistakes are easily avoidable if you know what to look out for. Let’s run through the biggest mortgage mistakes people make when buying a home in Georgia and how to stay ahead.
Not Checking Your Credit Before Applying
Your credit score makes or breaks your mortgage approval. If you’re not looking at your credit before you start the process, you’re walking into this blind.
- Lenders want to see a strong credit score. Anything above 700? You’re in a good spot. Below that? You might get approved, but you’ll pay way more in interest.
- Errors happen. A mistake on your report could tank your score. Get your free credit report from Annual Credit Report and fix anything that looks off.
- Pay down your debts. If your credit card utilization is through the roof, it’ll hurt your mortgage application. Keep your balances under 30% of your credit limit.
Skipping this step? Big mistake. You’ll either end up paying higher interest or, worst-case scenario, get denied.
Not Getting Pre-Approved
Shopping for houses before getting pre-approved is like showing up to a restaurant without a wallet. You’re just window shopping.
- Pre-approval tells you exactly what you can afford. Without it, you might fall in love with a house way out of your budget.
- Sellers take pre-approved buyers seriously. In a competitive market, an offer without pre-approval won’t stand a chance.
Get pre-approved before you start house hunting. It sets you up for success and makes the process way smoother.
Forgetting About Closing Costs
It’s easy to focus on just the down payment and monthly mortgage payment, but what about closing costs? These can sneak up on you.
- Expect to pay 2-5% of the home’s price in closing costs. On a $300K home? That’s another $6K–$15K.
- Fees include: Loan origination, appraisal, title insurance, and more. The numbers add up fast.
Don’t get caught off guard. Budget for these upfront.
Making Big Purchases Before Closing
You found the house. You’re excited. Now you’re thinking about buying new furniture or a car. Stop right there.
Lenders check your finances again before closing. If they see a big purchase or a new loan, it could mess up your debt-to-income ratio, and suddenly, your approval is in danger.
Wait until you have the keys in hand. That dream couch can wait.
Not Comparing Lenders
Grabbing the first mortgage offer you get? Huge mistake. You won’t know if you’re getting the best rate unless you shop around.
- Different lenders offer different rates and fees. A small difference in interest rates can cost—or save—you thousands over the life of the loan.
- Compare at least three lenders. Check banks, credit unions, and online lenders.
- Ask about closing costs and lender fees. A lower interest rate doesn’t always mean a cheaper loan.
Take the time to compare. Your wallet will thank you.
Ignoring Loan Types
Not all mortgages are created equal. The right loan depends on your situation.
- FHA loans: Great for first-time buyers with lower credit scores.
- Conventional loans: Best for buyers with good credit and stable income.
- VA loans: No down payment required, but only for eligible veterans.
- USDA loans: Perfect for rural areas with no down payment requirements.
Knowing your options could save you thousands.
Ignoring Property Taxes and Homeowner’s Insurance
Many buyers focus on just their mortgage payment. But property taxes and insurance will be a big chunk of your costs too.
- Property taxes in Georgia vary by county. Some areas have much higher tax rates than others.
- Homeowner’s insurance isn’t optional. The cost depends on location, home value, and coverage.
FAQs
How much should I save for a down payment?
It depends on the loan type. A conventional loan usually requires 5-20% down, but FHA loans can go as low as 3.5%. VA and USDA loans sometimes require zero down.
What credit score do I need to buy a home in Georgia?
A score above 700 is ideal, but FHA loans can approve buyers with scores as low as 580.
Can I buy a home with student loan debt?
Yes, but it depends on your debt-to-income ratio (DTI). Lenders want your total debt payments (including your new mortgage) to be below 43% of your income.
Should I get a 15-year or 30-year mortgage?
A 15-year loan has higher payments but saves you interest over time. A 30-year loan gives you a lower monthly payment but costs more in interest in the long run. Choose based on what fits your budget.
How long does it take to get a mortgage?
The average process takes 30-45 days, but it depends on the lender and how fast you provide all required documents.
Conclusion
Avoiding these common mortgage mistakes when buying a home in Georgia can save you stress, money, and time. Stay prepared, do your homework, and make moves that set you up for success.