Becoming a first-time homebuyer isn’t nearly as complicated as you may think. I would recommend anyone planning to live in the same city for +2 years purchase a home and not rent. It’s a way better and rewarding experience. A key factor to keep in mind when you rent, there are no post rental benefits and lease amounts are not guaranteed. When you leave a home you own it can be rented or sold outright providing the owner a return on investment. Most mortgages are also fixed and will not increase over time (taxes and insurance can fluctuate). Even a low credit score can get an affordable mortgage but speak to a professional lender or agent first. I work with 2 different lenders whom I trust to approve my clients when they need assistance.
Typically the process starts with a desire to own a home or need for more space, from there you’d get pre-approved with a bank or mortgage lender. Once you know what you can afford contact a real estate agent you can trust (Earl Adams with Rocklyn Homes/On Point Realty). You and your agent will discuss the budget, timeline, locations, style of homes, and all the fun stuff. Within the week your agent should be able to send you a list of possibilities. In the following weeks you’ll tour those properties and keep notes on things you like and don’t like (eat before you go, hunger is maddening). I’d recommend seeing no more than 5 properties per outing as it is tiring and after a while the homes start to run together.
Once you select the home you like your agent will place an offer on the property. If accepted, you’ll have to provide an earnest money check and be given a week or more for due-diligence. Provided there’s no major concerns during your due-diligence period, you and your lender take over in the financial approval stage. Once underwriting has approved the loan you move towards closing with the agreed upon attorney. After you close you move in!
This whole process can take 45 to 90 days on average. The upfront cash and downpayment you’ll need varies based on the purchase price, type of mortgage (conventional, FHA, VA, etc.), and lender you choose.
Below I’ve decided to share my first-time home buying story. I hope it encourages you to become a home owner or explore your options.
When I was 25 (2012) I started my first career job earning $34,000 a year. I was living in Alpharetta with my parents after having just moved out of my first apartment. I had about $1,100 in my savings account and a 632 credit score. After about three months on the job the continuous commute was adding hundreds of miles per week to my corolla and costing me at least 2 hours per day on the road. I decided I wanted to purchase my first home closer to Atlanta. I did my research on various neighborhoods and got pre-approved through Chase for about $116,000. My grandmother co-signed my loan application increasing my purchase power to $168,000. I enrolled in an Invest Atlanta new homebuyers program and was approved for downpayment assistance granting me $10,000 towards my home. I toured multiple condos in Atlanta with my agent Olivia but settled on a renovated 3 bedrooms 2.5 bathrooms house in the West End with a purchase price of $175,000. The deal ultimately fell apart due to financing complications. Despite the setback, I found another home in the same neighborhood with similar stats, better location, and open layout for $5,000 less. I switched lenders and one of my best friends also agreed to co-sign/co-own with me. It took less than 60 days to find the new home, get a approved, and close. We were awarded an additional $15,000 of downpayment assistance through Atlanta HUD because we purchased a home in the West End through a neighborhood rehabilitation program. Our loan was reduced from $170,000 to a $145,000 and we only had to provide $1,500 upfront. Our monthly mortgage payment on a fully remodeled 1,523 square foot home with fenced backyard was $968.00. Just to compare our West Midtown 3 bedroom apartment had a rent of $1,300 per month and was scheduled to increase every year. In 2 years we decided to sell our home at $235,000 because our lives were growing. We both walked away with over $20,000 a piece and now own beautiful larger homes in the city of Smyrna (not together, we own separate houses with our respective husbands lol).
Home buying can be stressful and cause anxiety. Don’t be afraid to tell your agent your tired, confused, need a break, or frustrated. As your agent our job is to help you make the right decisions and protect your interests. Never be afraid to ask questions, if you’ve never purchased a home everything will be new for you and it can be intimidating. I hope this article helps.