How much house can I afford in Georgia?
The bank will tell you the most you can borrow. This guide is about the most you should spend — which is usually a smaller number.
Start from the monthly payment, not the price
Listing prices are the number everyone looks at, but you will live with the monthly payment. Work backwards: decide what you can pay every month without strain, then turn that into a price.
A Georgia mortgage payment has four parts, usually collected together by the lender and called PITI: principal, interest, property taxes and homeowners insurance. Many homes add a fifth and sixth — mortgage insurance if you put less than 20% down on a conventional loan (or any FHA loan), and an HOA fee if the home is in an association.
- Principal and interest — set by the loan amount, the rate your lender quotes, and the term (usually 30 years).
- Property taxes — set by the county, city and school district. In Georgia, tax is figured on 40% of the home's assessed value, so two homes at the same price in different counties can carry very different tax bills. See property taxes in Georgia.
- Homeowners insurance — priced by the insurer for that house; get quotes during due diligence.
- Mortgage insurance — PMI on conventional loans with under 20% down, MIP on FHA loans. Your lender quotes it.
- HOA dues — paid to the association, often separately from the mortgage.
What lenders will approve: debt-to-income
Lenders measure affordability with your debt-to-income ratio (DTI): your total monthly debt payments, including the new housing payment, divided by your gross monthly income. Each loan program and each lender sets its own limits, and those limits move with your credit score, savings and down payment, so ask your lender for the figure that applies to you rather than relying on a rule of thumb.
The approval number is a ceiling, not a recommendation. DTI uses gross pay, before taxes, retirement savings and health insurance, and it ignores childcare, groceries, commuting and everything else that comes out of your account. Plenty of buyers are approved for a payment that would leave them with nothing at the end of the month.
Our guide to debt-to-income ratio walks through the calculation with your own numbers.
A budget you can live with
A better test is your take-home pay. Add up what actually leaves your account each month today — rent, car, cards, phone, food, subscriptions, savings — and see how much housing payment fits while you keep saving something every month. If the answer is far below what the lender approved, believe the smaller number.
Then stress-test it. Could you still pay if your property tax bill rose after a reassessment, the insurance premium went up at renewal, or one income paused for a few months? A home you can afford only when nothing goes wrong is a home you cannot afford.
The cash you need before you get the keys
Affordability is also a cash question. Before closing you will need:
- Earnest money when your offer is accepted — it is credited back to you at closing. See earnest money in Georgia.
- Inspection and due diligence costs — home inspection, termite letter, maybe a sewer scope, survey or specialist.
- Appraisal fee, paid through the lender.
- Down payment — from 0% (VA, USDA) or a small percentage (FHA, some conventional programs) to 20% or more.
- Closing costs — lender fees, title insurance, attorney fees, Georgia's intangible recording tax, prepaid interest, and initial escrow deposits for taxes and insurance. See Georgia closing costs for buyers.
- A reserve — money left over after closing. Some lenders require reserves; you should want them anyway.
Turning a payment into a price
Once you know the monthly figure you are comfortable with, ask a lender to run it backwards with today's rate, your down payment and the taxes and insurance for the areas you are looking at. That gives you a price range. Getting pre-approved does the same thing with your documents verified, which is what sellers want to see with an offer.
Prices vary sharply across metro Atlanta. Our live list of the most affordable cities near Atlanta ranks the cities we cover by median asking price, refreshed daily from active listings, which is a quick way to see where your number stretches furthest.
Costs that arrive after closing
The first year in a house tends to cost more than buyers expect: window coverings, a lawn mower, a fridge that came out with the seller, a water heater at the end of its life. Set aside money for maintenance from the start. The hidden costs of owning a home covers the list.
Common questions
How much house can I afford on my salary?
It depends on your other debts, your down payment, the interest rate you are quoted, and the property taxes and insurance on the specific home. A lender can calculate your maximum from your debt-to-income ratio; a safer personal limit is a payment that still leaves room to save every month from your take-home pay.
Do property taxes change how much house I can afford in Georgia?
Yes. Taxes are part of the monthly payment, and Georgia millage rates are set separately by each county, city and school district, so the same price can mean a noticeably different payment in neighboring counties. Check the county's current millage before settling on a price range.
Should I spend the full amount I'm pre-approved for?
Not necessarily. The pre-approval is the most a lender will lend, calculated on gross income. Many buyers choose a lower price so they keep savings, cover maintenance and absorb tax or insurance increases.
How much cash do I need to buy a house in Georgia?
Plan for earnest money, inspection costs, the appraisal, your down payment, closing costs and a reserve. Your lender's Loan Estimate lists the closing costs and cash to close for your specific loan.
Does an HOA fee count toward what I can afford?
Yes. Lenders include HOA dues in your debt-to-income ratio, and you should include them in your own budget alongside any special assessments the association has voted.
Read next
General information for Georgia home buyers, not legal, tax or lending advice. Loan programs, rates, limits, tax rates and insurance terms are set by lenders, agencies, counties and insurers and change — confirm current figures with them, and have your closing attorney review anything you sign.