The median price of homes sold in Georgia is $183,700, with home values have risen 11% in the last year, according to Zillow.
Average listing prices are expected to continue their upward trajectory thanks to the rise in Atlanta’s national economic importance as an epicenter for film, technology, media communications, and finance.
Statewide, the sales prices of Georgia’s homes are less than half of the national standard of $436,800, according to according to the St. Louis Fed FRED Economic Data.
The factors impacting current mortgage rates in Georgia–i.e., rising urban population density, affordable homes in rural areas, tech-sector growth, and demographic shifts–make for a unique and inviting real estate environment for prospective homebuyers.
Current Mortgage & Refinancing Rates in Georgia
7 Critical Elements That Affect Mortgage Rates & Refinance Rates in Georgia
When surveying mortgage rates in Georgia, borrowers may find significant variations in the quotes they receive. This is due to lender-specific requirements, local real estate pressures, and underlying financial conventions that help determine home loan eligibility, loan amounts, and types of interest rates.
As always, it pays to research, compares, and negotiate loan terms. Below are seven factors that borrowers should keep in mind when assessing their mortgage options:
Loan term
The life, or length, of the loan plays a crucial role in how interest rates are decided. For instance, a traditional 30-year fixed-rate mortgage means a borrower has three decades to pay back a lender, a long period that could potentially be fraught with certain risk in the lender’s eyes.
As such, longer loan terms often come with higher mortgage rates. Conversely, a shorter-term loan of, say, 15 years, is more likely to be a) paid back sooner, b) involve a more substantial down payment, and c) require a higher monthly payment.
For these reasons, shorter loans may be perceived as less risky for capable borrowers, resulting in somewhat lower interest rates.
Credit score
Lenders prefer credit scores on the higher end (in the 700+ range). This figure is used as part of a comprehensive buyer profile, helping to determine whether a borrower is likely to be able to pay back the entirety of a home loan under the term agreements.
Lower scores (600 or below) may lead to higher interest rates, or ineligibility for securing a loan at all, since lenders may not be as confident in the borrower.
Through Experian, TransUnion, and Equifax, borrowers can receive one free credit report per year, highlighting, among other things, their credit scores, which should clue them into where they stand in the eyes of mortgage lenders.
Down payment
Larger down payments typically result in lower interest rates, and smaller (or zero) down payments can lead to higher interest rates. Industry standards posit that a 20% down payment is representative of a borrower’s ability to front enough money that he or she will also likely be able to meet their monthly mortgage obligations as well.
That’s why borrowers should try to pay as much of a down payment as they can since it then results in a lower mortgage rate. On the other hand, buyers who can put up only 5 or 10% may receive higher interest rates because they have less capital at the moment, which also might hold true in the future.
Type of interest rate
Rate terms are either fixed or adjustable. A fixed-rate of interest means a borrower pays the same percentage of interest every month, which is often preferable to borrowers who don’t anticipate their incomes rising much in the future, or who are just more comfortable locking in a set rate they can plan for.
An adjustable-rate mortgage (ARM) works the opposite way. The interest rate stays fixed over a limited predetermined period, often five, seven, or ten years. After this, the rate will go up or down each year depending on the lender’s terms and a host of macroeconomic housing factors.
ARMs may be cheaper at the start of a loan, though in the end, they often become more expensive on a monthly basis. This type of loan is, therefore, best for borrowers who plan on moving within the fixed-rate period.
Home location
The exact location of a property affects both its mortgage and refinancing rates. Certain neighborhoods are riskier than others, and some cities command higher home values, leading to variability in loan amounts and interest rates.
In dense, urban centers, condominiums and multi-unit structures comprise a more substantial portion of overall city real estate, but as Fannie Mae notes, due to their manufacture and location, these types of properties are viewed as riskier investments.
That’s why interest rates are often 0.25 percentage points higher relative to traditional single-family homes, which may be more common in rural areas.
Type of refinance
As borrowers replace one home loan with another in an attempt to reduce their mortgage rates, they have different types of refinance loans to consider. The most conventional form, the rate-and-term, produces a lower interest rate, as does a traditional fixed-rate refinance.
On the other end of the spectrum, cash-out and adjustable-rate refinances may result in higher interest rates in the near term.
Loan-to-value
The amount owed on a home relative to the appraised value of that home is the loan-to-value ratio. If a borrower still owes $50,000 on a $200,000 home, the LTV is 25% (three-quarters of the loan is paid off, with one-quarter still to go).
Lenders often require borrowers to purchase mortgage insurance if their LTV is higher than 80%, though once LTVs lower, borrowers may be able to refinance into a lower-rate mortgage. As more equity is gained in a home, borrowers have more leverage to negotiate better mortgage terms.
How to Get the Best Mortgage & Refinancing Rates in Georgia
One of the best ways to capitalize on the factors mentioned above is for borrowers to approach several different lenders to discuss potential mortgage options that best fit their respective needs.
The crux of the home buying and refinance every avenue for saving money, whether that’s via a lower interest rate or through the waiving of certain fees.
For instance, most borrowers can expect to pay additional surcharges for appraisals, origination, document preparation, applications, title insurance, and more. However, lenders are often flexible with these fees for you to sign on the dotted line. All of this is to say that home loans are entirely negotiable, and this knowledge is a powerful tool.
The problem is that a large percentage of consumers, almost half, forgo comparison shopping; merely opting for the first lender they speak to, and taking the first deal that findings from the Consumer Financial Protection Bureau.
Considering that fees can go into the tens of thousands of dollars and that a marginal difference in mortgage rates can also result in a considerable amount of money over the lift themselves in financially compromising situations right out of the gate, all because they didn’t truly evaluate the options available to them.
Speak with four or five lenders with local expertise before settling on a home loan. Real estate agents, and even friends or relatives who’ve gone through the process before can assist in home buying and refinancing journeys.
Recommended Companies in Georgia
Rocket Mortgage
Rocket Mortgage aids borrowers in an online format that auto-fills and auto-predicts much of the manual data entry and processing that’s commonplace when purchasing a property. Mortgage solutions are customizable, and applications for purchasing and refinancing can be approved in just minutes.
Quicken Loans
As the nation’s largest mortgage lender, Quicken Loans allows borrowers to lock in low mortgage rates for up to 90 days while they’re still going through the home buying process. This is but one of the reasons the financial institution has ranked atop J.D. Power’s Primary Mortgage Origination Customer Satisfaction list for eight consecutive years.
Borrowers can quickly determine their monthly mortgage payments through Quicken’s convenient online calculator, and prospective buyers can see real-time mortgage rate updates across five different loan types (15-year fixed, 30-year fixed, 5-year ARM, 30-year fixed FHA, 30-year fixed VA).
Lending Tree
Gain immediate online quotes without having to wait for forms to process or reps to reach out. Lending Tree provides a host of configurable rate quotes and calculators based on zip code, making purchasing property in Georgia more seamless than ever.
Ally Bank
Ally Bank offers online-only, personalized mortgage services and interest rates on 30-year fixed-rate mortgages in the sub-5% range. Borrowers can prequalify and apply for loans in just minutes, and the entire home buying process is simplified, intuitive, and easy to understand compared with the standards of more traditional lenders.
