By Christopher Adams | Keller Williams Coastal Area Partners
One of the most common surprises I see buyers experience — even buyers who have done their research, who have been pre-approved, who think they know what they’re getting into — is the gap between the purchase price of a home and the actual total cost of buying it. That gap can be substantial, and being caught off guard by it at or near closing is one of the most stressful experiences in an already stressful process.
The purchase price is just the beginning. By the time you close on a home in Georgia, you will have spent money on a down payment, closing costs, inspections, insurance, prepaid items, and potentially several other categories that don’t show up on the listing page. Understanding all of these costs in advance — with real numbers, not vague ranges — is essential for budgeting accurately and making smart decisions about what you can actually afford.
Let’s go through every category, one by one.
The Down Payment
The down payment is the largest upfront cost for most buyers, and it’s the one most people are already thinking about. But the amount you need depends entirely on the loan type you’re using, and there’s more flexibility here than many first-time buyers realize.
Conventional loans typically require a minimum of 3% down for first-time buyers and 5% down for repeat buyers, though putting down less than 20% means you’ll pay Private Mortgage Insurance (PMI) until your equity reaches 20%. On a $350,000 home, a 5% down payment is $17,500. A 20% down payment is $70,000. The difference in monthly PMI cost is meaningful — typically $50 to $200 per month depending on your loan amount, credit score, and the specific PMI rate.
FHA loans require 3.5% down with a credit score of 580 or higher, or 10% down with scores between 500 and 579. FHA loans come with both an upfront mortgage insurance premium (1.75% of the loan amount, typically rolled into the loan) and an annual mortgage insurance premium paid monthly. On a $350,000 home with 3.5% down, the upfront MIP rolled into the loan adds about $5,900 to your loan balance.
VA loans for eligible veterans and active military members require no down payment and no PMI, making them one of the most powerful financing tools available. There is a VA funding fee (currently ranging from 1.25% to 3.3% of the loan amount depending on whether it’s your first use and other factors), which can be rolled into the loan or paid at closing. If you’re a veteran or active military and haven’t explored your VA loan eligibility, it should be the first conversation you have with a lender.
USDA loans are available for properties in eligible rural areas and also require no down payment. Parts of the greater Savannah metro — particularly some areas in Bryan, Effingham, and Liberty counties — may qualify for USDA financing. Worth checking if you’re looking outside the urban core.
Georgia Dream is the Georgia Department of Community Affairs’ first-time homebuyer program, which offers down payment assistance of $10,000 to $12,500 (depending on the specific program) to eligible buyers. Income limits and purchase price limits apply, but for qualifying buyers this program can be a significant resource. Your lender should be able to walk you through eligibility.
Closing Costs
Closing costs are the category that surprises buyers most frequently, because they’re not always clearly explained during the pre-approval process and they add up to a meaningful number. In Georgia, buyers should budget for closing costs in the range of 2% to 4% of the purchase price, though the actual number varies based on loan type, lender, and negotiated terms.
Here’s what closing costs typically include:
Loan origination fee: Charged by your lender for processing and originating your loan. Typically 0.5% to 1% of the loan amount, though some lenders charge a flat fee. On a $320,000 loan, that’s $1,600 to $3,200.
Discount points: Optional prepaid interest you can pay at closing to buy down your interest rate. One point equals 1% of the loan amount and typically reduces your rate by 0.25%. Whether buying points makes sense depends on how long you plan to keep the loan — the longer you stay, the more the monthly savings outweigh the upfront cost.
Appraisal fee: Your lender will require an independent appraisal to confirm the home is worth what you’re paying. Appraisals in the Savannah area typically run $500 to $750 for a standard single-family home.
Credit report fee: Usually $25 to $75, charged by the lender to pull your credit.
Title search and title insurance: The title company or closing attorney searches the property’s ownership history to confirm the seller has clear title to convey. In Georgia, closings are conducted by real estate attorneys rather than title companies, which is somewhat unique to Georgia and a few other states. Lender’s title insurance (protecting your lender) is required. Owner’s title insurance (protecting you) is optional but strongly recommended. Combined title costs typically run $1,000 to $2,000 depending on the purchase price.
Attorney fees: In Georgia, the closing attorney represents the lender and handles the closing process. Attorney fees typically run $500 to $1,000.
Recording fees: The deed and mortgage documents are recorded with Chatham County (or the relevant county) after closing. Recording fees are modest — typically $25 to $75.
Georgia transfer tax: Georgia charges a real estate transfer tax of $1 per $1,000 of purchase price (technically $0.10 per $100). On a $350,000 purchase, that’s $350. This is typically a seller cost in Georgia but can be negotiated.
Survey: Not always required, but lenders sometimes require a survey to confirm property boundaries. If required, budget $300 to $600.
Home warranty: Optional but worth considering. A one-year home warranty covering major systems and appliances typically runs $400 to $700 and can provide meaningful peace of mind in the first year of ownership.
Prepaid Items and Escrow Deposits
This is a category that many buyers don’t fully account for because it’s separate from closing costs but paid at the same time. Prepaid items and escrow deposits can add $3,000 to $6,000 or more to your closing day costs depending on your loan, your closing date, and your insurance and tax situation.
Prepaid homeowners insurance: Your lender requires you to have homeowners insurance in place at closing, and you’ll typically need to prepay the first year’s premium at closing. In coastal Georgia, homeowners insurance runs anywhere from $1,500 to $3,500 per year for a typical single-family home, and higher for older homes or those in areas with specific risk factors. Get insurance quotes early in the process so this number doesn’t blindside you.
Prepaid mortgage interest: You pay interest from your closing date through the end of the month at closing. If you close on the 5th of the month, you’re paying 25 days of prepaid interest. If you close on the 28th, you’re paying 2 or 3 days. The timing of your closing date affects this cost.
Escrow account setup: Your lender will typically establish an escrow account to collect monthly portions of your property taxes and homeowners insurance, then pay those bills when they’re due. At closing, you’ll need to fund this escrow account with a cushion — typically two to three months of property taxes and two months of insurance premium. This can add $2,000 to $4,000 to your closing costs depending on the property’s tax rate and your insurance premium.
Flood insurance: If your property is in a designated flood zone, your lender will require flood insurance. This is purchased separately from homeowners insurance through the National Flood Insurance Program or private flood insurers. Flood insurance premiums in the Savannah area vary widely — from a few hundred dollars annually for properties in lower-risk zones to $2,000 or more for properties in AE flood zones with significant exposure. Factor this into your monthly housing cost calculation early.
Inspection Costs
Georgia’s standard purchase contract includes a due diligence period — typically negotiated to 10 days or so — during which you can have the property professionally inspected and walk away from the deal for any reason without losing your earnest money. The inspections you choose to conduct during this period are paid out of pocket regardless of whether the deal closes.
General home inspection: A thorough inspection by a licensed home inspector covers the structure, roof, foundation, HVAC, plumbing, electrical, and more. Expect $350 to $500 for a typical single-family home in the Savannah area, more for larger homes.
Termite/WDO inspection: Wood-Destroying Organism inspections are essentially standard in coastal Georgia given the climate and the prevalence of termites. A WDO inspection typically runs $75 to $150. If treatment is needed, that’s a separate cost that can range from a few hundred dollars for a spot treatment to several thousand for a full tenting.
Radon testing: Less commonly required in coastal Georgia than in some other regions, but worth considering. Radon test kits run $150 to $250 for a professional test.
Sewer scope: For older homes, having the sewer line scoped with a camera to check for root intrusion, breaks, or other issues is worth the $200 to $350 cost. Sewer repairs can be expensive, and knowing the condition before you close gives you negotiating leverage.
Specialty inspections: Depending on the property, you might also want a structural engineer’s assessment, a pool inspection, a chimney inspection, or an inspection for Chinese drywall (relevant for some homes built between 2001 and 2009 with imported materials). Each of these adds to the inspection budget.
Total inspection costs for a thorough due diligence process on a typical Savannah area home: budget $700 to $1,200.
Moving Costs
Often overlooked in the home-buying cost calculation, moving costs are real and vary significantly based on distance and volume.
A local move within the Savannah area using a professional moving company typically runs $800 to $2,000 depending on the size of your home and how much labor is involved. A long-distance move from another state can run $3,000 to $10,000 or more. If you’re doing a DITY (Do It Yourself) move, factor in truck rental, fuel, packing supplies, and any storage costs if there’s a gap between your old home’s exit date and your new home’s closing date.
Immediate Post-Closing Costs
First-time buyers especially tend to forget that the expenses don’t stop at closing. Most buyers have a list of things they want to do to a new home before or shortly after moving in — paint, new locks, cleaning, minor repairs, landscaping, window treatments, appliances if the home didn’t include them, and so on.
Even a modest set of initial improvements can add $2,000 to $5,000 to your first-month costs. For homes that need more significant work, that number grows quickly. Budget for this honestly before you commit to a purchase price, because running out of cash immediately after closing is a stressful and avoidable situation.
The Real Total: Putting It All Together
Let’s run a realistic example for a $350,000 home purchase in the Savannah area with a conventional loan and 5% down:
- Down payment (5%): $17,500
- Closing costs (estimated 2.5%): $8,750
- Prepaid insurance (first year): $2,000
- Escrow setup (taxes + insurance cushion): $3,000
- Inspections: $900
- Moving costs: $1,500
- Initial post-closing costs: $3,000
Total cash needed: approximately $36,650
That’s significantly more than the $17,500 down payment alone, and it’s why budgeting only for the down payment leaves buyers unprepared. The actual cash-to-close number on your Closing Disclosure — the formal document your lender provides before closing — will reflect most of these costs in detail, but you want to understand them well before you’re three days from closing.
How to Reduce Your Closing Costs
There are legitimate ways to reduce the cash you need at closing without compromising your position.
Seller concessions: In today’s market, it’s entirely reasonable to ask the seller to contribute to your closing costs as part of your offer negotiation. Conventional loans allow seller concessions up to 3% of the purchase price (or more, depending on your down payment). A $350,000 purchase where the seller contributes 2.5% in concessions puts $8,750 back in your pocket at closing. Structuring your offer to request seller concessions while maintaining a competitive price is a strategy I use regularly with buyers.
Lender credits: You can accept a slightly higher interest rate in exchange for lender credits that offset closing costs. This trades a higher monthly payment for lower upfront costs, which makes sense for buyers who are cash-constrained and plan to refinance when rates improve.
Shop your lender: Closing costs vary between lenders, sometimes significantly. Getting quotes from two or three lenders and comparing the Loan Estimate documents they’re required to provide is a straightforward way to identify savings.
Georgia Dream assistance: As mentioned above, qualifying buyers can access $10,000 to $12,500 in down payment assistance, which can dramatically reduce your cash-to-close requirement.
The bottom line is that buying a home in Georgia costs more than the down payment, and understanding the full picture before you start shopping puts you in a dramatically stronger position — financially and emotionally — than discovering the real numbers at the closing table. If you have questions about what a purchase in the Savannah area would actually cost in your specific situation, reach out. I’m at christopheradams.com or 912-661-2079.