Mortgage Guides & Articles

What Does It Actually Cost to Buy Your First Home?

A lot of first time buyers think the only money they need upfront is a down payment. The truth is there are several other costs involved and if you are not prepared for them they can catch you off guard right before closing.

Here is a real breakdown of every dollar you should plan for when buying your first home.

1. The Down Payment

This is the big one everyone thinks about. The amount depends on your loan type:

• FHA Loan: 3.5% down. Great for first time buyers with credit scores as low as 580.
• Conventional Loan: As low as 3% down with strong credit
• USDA Loan: 0% down in eligible rural areas (parts of Coastal Georgia qualify!)
• VA Loan: 0% down for eligible veterans and active military

On a $300,000 home, a 3.5% FHA down payment is $10,500. A 5% conventional down payment is $15,000. These are significant numbers to plan for.

2. Closing Costs

Closing costs are fees paid to the lender, title company, and other parties at the end of the transaction. They typically run between 2 and 4% of the purchase price and include things like:

• Origination fees
• Appraisal fee ($500–$750)
• Title search and title insurance
• Attorney fees (Georgia requires a real estate attorney at closing)
• Prepaid homeowners insurance and property taxes
• Prepaid mortgage interest

On that same $300,000 home, budget $6,000–$12,000 for closing costs. The good news: you can often negotiate for the seller to cover some or all of these.

3. Home Inspection

Always get a home inspection. A standard inspection costs between $350 and $600 and can reveal problems that either get the seller to make repairs or save you from a costly mistake. This is money spent before closing but absolutely worth it.

4. Earnest Money

When you make an offer, you will put up what is called earnest money. This is typically 1 to 2% of the purchase price and it shows the seller you are serious. It goes toward your down payment at closing but you need to have it ready to go the moment you make an offer.

5. Moving Costs & Reserves

Do not forget you also have to move. Local moves typically run between $1,000 and $2,500. On top of that, most lenders want to see that you have some money left in the bank after closing. A good target is 2 to 3 months of mortgage payments in reserves.

DSCR Loans: The Real Estate Investor's Secret Weapon

If you are a real estate investor and you have been turned down for a mortgage because of your income, or because you already own multiple properties, you may not have heard of DSCR loans. They are one of the most powerful tools available to investors and most people have never even been told they exist.

What is a DSCR Loan?

DSCR stands for Debt Service Coverage Ratio. In plain English, a DSCR loan qualifies you based on what the property earns in rent, not your personal income. This is a big deal for investors who are self employed, have complicated tax returns, or already own several properties and have trouble qualifying the traditional way.

The math is simple: DSCR = Monthly Rental Income divided by Monthly Debt Obligations (principal, interest, taxes, and insurance)

• A DSCR of 1.0 means the property covers exactly its own costs
• A DSCR of 1.25 means the property generates 25% more income than its debt — lenders love this
• Some lenders will go as low as 0.75 for strong borrowers in high-demand rental markets

Why Investors Love DSCR Loans

• No personal income verification — your W-2s and tax returns don't matter
• No limit on number of properties — scale your portfolio without conventional loan restrictions
• Close in an LLC — many DSCR lenders allow entity ownership for asset protection
• Available for short-term rentals — some lenders use Airbnb/VRBO income history for qualification
• Faster closing — less documentation means a streamlined process

What Are the Tradeoffs?

DSCR loans are portfolio or non-QM loans, meaning they don't go through traditional Fannie Mae/Freddie Mac channels. The tradeoffs:

• Higher rates — typically 0.5%–1.5% higher than conventional investment property loans
• Larger down payment — usually 20–25% minimum
• Stronger credit profile — most lenders want 680+ credit score

DSCR Loans in Coastal Georgia

Coastal Georgia, especially the Savannah and Golden Isles markets, has seen strong growth in short term rental demand. Tybee Island, St. Simons Island, and Jekyll Island properties can generate solid rental income that works well for DSCR qualification. If you are looking at a vacation rental in these markets, this type of financing is worth a conversation.

Is Coastal Georgia Still a Good Place to Buy in 2026?

The Coastal Georgia real estate market, which covers Savannah, Brunswick, the Golden Isles, Camden County, and the surrounding areas, has had a strong run over the past several years. For buyers and investors considering this area, the real question is whether there is still opportunity or if the window has closed.

My honest take as a loan officer who works in this market every day: the fundamentals are still strong, but you need to be strategic.

Why Coastal Georgia Keeps Growing

• Population growth: Savannah is one of the fastest-growing cities in Georgia. The Savannah metro has added tens of thousands of residents in recent years driven by job growth, retirees, and remote workers.
• Major employers: The Port of Savannah — the busiest container port on the East Coast — continues to expand. Hyundai's EV plant in Bryan County is projected to bring 8,000+ direct jobs and a multiplier effect of supporting businesses.
• Tourism and short-term rentals: Savannah's tourism market is robust year-round. Tybee, St. Simons, and Jekyll Island consistently rank among Georgia's top vacation destinations, creating strong short-term rental income potential.
• Military presence: Fort Stewart (Army) and Kings Bay Naval Submarine Base drive consistent housing demand and support a strong VA loan market.

What Buyers Should Know Right Now

Inventory is still tighter than normal in most parts of Coastal Georgia. Getting pre approved before you start shopping is not optional in this market. It is essential. Sellers will not take you seriously without it and you do not want to lose a home you love because your paperwork was not ready.

Interest rates have come back down from the highs we saw a couple of years ago. Prices have stabilized in most areas and sellers are more willing to negotiate than they were before.

Opportunities for Investors

The long-term rental market is strong thanks to population growth, and short-term rentals in the barrier islands and Savannah's historic district continue to generate compelling returns. The key is buying right — which starts with smart financing.

Pre-Qualification vs Pre-Approval: What Is the Difference and Why It Matters

If you have started looking into buying a home you have probably seen both of these terms. They sound similar and a lot of people use them interchangeably. But they are very different and confusing the two can cost you the home you want.

Pre-Qualification: The Quick Estimate

Pre-qualification is a quick informal estimate of what you might be able to borrow. A lender asks a few basic questions about your income and debts, no documents required, no credit check, and gives you a rough number. It takes about 10 minutes and it is really just a starting point.

Pre-qualification is fine if you are just getting curious. It is not what you want in hand when you are writing an offer.

Pre-Approval: The Real Thing

Pre-approval is a real review of your finances. You submit actual documents like pay stubs, W-2s, bank statements, and tax returns, and the lender pulls your credit. What you get back is a conditional commitment to lend you up to a specific amount.

Why does that matter? Because a pre-approval letter tells a seller that this buyer has been reviewed and is ready to close. In a competitive market that is often the difference between getting the house and losing it.

What You Need for Pre-Approval

• Last 2 years of W-2s (or tax returns if self-employed)
• Recent pay stubs (last 30 days)
• Last 2 to 3 months of bank statements
• Government-issued ID
• Permission to pull credit

When Does It Actually Make Sense to Refinance?

Refinancing sounds great on paper. Lower payment, better rate, cash in your pocket. But it is not always the right move. The answer depends on your specific numbers and a lot of homeowners either refinance when they should not or wait too long when they should.

Here is a simple way to think about it.

The Break-Even Rule

Refinancing costs money, typically between $3,000 and $6,000 in closing costs. The question is how long it takes for your monthly savings to cover that cost.

Example: If refinancing saves you $200 a month and costs $4,800 to do it, your break even point is 24 months. If you plan to stay in the home longer than that it makes sense. If you are moving in 18 months it does not.

When Refinancing Makes Sense

• Rate drop of 0.75%+: The old "1% rule" is outdated. Even a 0.5–0.75% drop can make sense depending on your balance and timeline.
• Removing PMI: If your home has appreciated and you now have 20%+ equity, refinancing out of FHA (which carries lifetime MIP) can save hundreds per month.
• Switching from ARM to Fixed: If you're in an adjustable-rate mortgage and rates are rising, locking in a fixed rate protects you from payment shock.
• Cash-out for high-return use: Using home equity to pay off high-interest debt or fund a down payment on an investment property can make excellent financial sense.
• Shortening your term: Refinancing from a 30-year to a 15-year can save you enormous amounts in total interest — if you can handle the higher payment.

When to Wait

• You're planning to sell or move within 1–2 years
• You've recently refinanced and your break-even is still in the future
• Your credit score has dropped since your original loan — fix that first
• You're close to paying off the loan — at that point, most of your payment is principal, not interest