One of the most satisfying things about being an adult is being able to buy a house. Owner-occupied homes deliver more privacy than when renting, and purchasing your first home delivers a sense of accomplishment and pride of ownership.
If you've been renting a home and you're ready to say 'yes' to the American Dream of owning a home, make sure you're ready! While the idea of buying a house is exciting, new buyers must ask these four questions before closing on a home in Atlanta, Georgia.
1. Can I Afford to Buy Atlanta Real Estate?
The cost of homeownership often exceeds costs for an individual or family as renters. While you pay a monthly rent amount and utility bills (if your property owner doesn't cover those costs for you), you aren't responsible for the mortgage, repair, or other operating expenses to keep your home in excellent condition. The owner of your property handles those things.
When purchasing a house, every expense becomes your responsibility. In addition to homeowner costs, purchasing the house requires a downpayment, pre-approval application fees, and closing costs. Even with affordable housing prices and incentives like low-interest rates, first-time buyer programs, and tax credits, the startup costs for buying a house require careful budgeting and planning. Plus, homeowners' insurance is often more expensive than the renter's insurance you currently have.
Do you have enough cash to buy a house (and maintain ongoing expenses)? Renters should create a budget for the monthly mortgage payment and homeownership costs for owning Georgia properties and ensure that they're financially prepared to own a home.
2. Am I Prepared To Take On a Mortgage?
Mortgage loans are available to those with low and high incomes, but there are risks associated with every mortgage. In addition, lenders evaluate your 'creditworthiness' to minimize their risk when offering a home loan.
How is your credit? You might have enough cash saved for a nice down payment and to cover some of the upfront costs we mentioned above, but a low credit score could keep you from qualifying for a mortgage with reasonable rates and requirements.
Before planning too far ahead in your Atlanta homebuying journey, check your credit score. Anything below a score of 620 can leave you with fewer mortgage options and higher interest rates. If you find your score too low, take time to improve your credit and wait to go through the mortgage pre-approval process for better loan options.
3. Do I Plan to Stay In the Home for At Least Five Years?
Buying a house is a long-term commitment. While things happen and people have to sell a house soon after moving in, it's best to plan to stay in a home for at least five years before moving again.
Selling and moving before that five-year mark often means that homeowners won't recover any costs they put into the home. You also haven't built much equity in the house to make a favorable mark on your credit report and financial situation.
If you don't plan to stay in a home for more than a couple of years, continuing to rent might be a better financial option for you. As you plan to buy a house or consider your next housing options, talk with your property manager and a mortgage lender to guide you. Your Atlanta property manager is experienced in more real estate areas than simply managing a rental home. They can often offer insights into leaving 'renting' behind to become a 'homeowner!'
4. Is it a Worthwhile Investment?
Buying a house is a wonderful life milestone, but before you leave renting behind, make sure the house you buy is a worthwhile investment. Talk with your property manager about the Atlanta, Ga real estate market and make sure the timing is right to stop paying the rent every month and start paying monthly mortgage payments instead.
Buying your ideal choice of Atlanta homes for sale can be a wonderful investment, but make sure to do plenty of research about the neighborhood, local schools, resale values, and more. Then, whether you prefer downtown Atlanta or one of our nearby suburbs, work with local real estate professionals to analyze the market from a buyer's perspective to help ease the transition from 'renter' to 'buyer!'
Be Prepared Before Buying an Atlanta Home
There is no denying that homeownership can be a major life change. Renters have to think through these critical questions and plan for the responsibilities of owning a home, from budgeting to the state of their credit score. You may even want to work with an experienced real estate agent or mortgage broker specializing in working with 'renters-to-homeowners.'
If you're thinking about making this transition, we'd love to help! Revolution Rental Management helps renters become homeowners, including handling the end of a lease term and working with property owners to help you make a smooth transition out of your rental. So, if you're considering homeownership, let's talk soon!
We've put together an excellent resource for 'renters' becoming 'buyers!' Download your free copy of 'The Complete Home Buying Guide for Current Renters: What You Need to Know Before You Make an Offer.'