A home is often the biggest investment people will make in their lives. Most people can afford a home they love and are happy to call their own. Sometimes, things don’t go according to plan. These are five reasons why people can’t purchase a home in Atlanta.
5 Reasons People Can’t Purchase a Home in Atlanta
Not Getting Pre-Approved
Get serious about getting a loan if you’re serious about purchasing a home. Pre-qualification is not a guarantee of approval. It’s merely an estimate of the value that a lender will give you. Pre-approval means that the lender has reviewed your credit and looked at your tax returns. They will also assess your financial situation and provide you with an estimate of what you can afford.
You might accept an offer on a house but be unable to finance the loan if the lender doesn’t have all the information beforehand.
Do not have Closing Money
When considering other expenses, many people think only about the down payment. Closing costs are inevitable, and you must have the funds to cover them. All costs, including appraisals and inspections, are due at closing. Some costs can be rolled into your loan, while others cannot.
At the beginning of the loan process, talk to your lender to ensure you have enough money to close. In closing costs, you can expect to pay between two and five percent of your home’s value. If you don’t have enough cash, you might need to tap retirement funds, obtain gift funds, or walk away from the deal.
Too Much Debt
When deciding if you are able to buy a house, lenders look at your total debt-to-income ratio. Your monthly debt payments should not exceed 33 percent of your monthly income. If your monthly income is stable, but your credit card and car payments are eating away at it each month, lenders may not be comfortable lending to you.
Keep in mind that if you have a student loan in forbearance, the lender will use the amount you pay when the forbearance ends.
Apply for a Credit Line for Furniture Purchases
It happens all the time. The escrow process has begun, and you have been pre-approved. You are excited to move in and have the new living room set delivered so you can enjoy your first football game. You’re not happy that you chose to finance the furniture company for six months.
This is a credit inquiry that could lead to additional debt and can impact your loan. Lending funds are sometimes denied to people who have not been pre-approved due to last-minute credit inquiries. It is a good rule to wait until the escrow process closes before you receive your furniture. This won’t affect your financial picture but will delay things for a while.
Searching for your Dream Home
You can’t always get what you want. We’ve all heard it. This is true when you’re purchasing a house. It might take a while before getting your dream home with a chef’s kitchen, a spa tub, and a swimming pool.
Smart buyers will only buy what they can afford and live in comfortable areas. They get equity as their property values rise and they make more payments. This equity you can use to make a down payment on the first property you sell to purchase a bigger and more luxurious home. Use equity to buy your dream home.
Rent-to-own as an alternative
If any of the 5 reasons above are preventing you from owning your own home, try Rent-to-own. You can move into a beautiful home in an area you love and start building lifelong memories.
With rent-to-own, you get to lease the house for up to 3 years with the EXCLUSIVE right to buy that home during the time of your lease. You can take this time to improve your credit and save for a solid down payment. Then get the best mortgage possible and buy the home.