Are You Ready to Buy Your First Home? Find Out!

Susan Lombardo  |  November 6, 2022

Are You Ready to Buy Your First Home? Find Out!

As a first-time homebuyer, you may not be sure where or how to begin your home search. Several factors go into buying a home, like getting preapproved for a mortgage, partnering with an agent, and preparing to move. Before starting these tasks, follow this advice for first-time homebuyers. But first, here’s what you can expect of the real estate market when searching in Johns Creek, GA.

Incorporated in 2006, Johns Creek has become a popular area for buyers searching for homes near Atlanta. Its great education system is a major pull for buyers with families, while outdoor recreation in areas like Ocee Park draws buyers and residents alike. Currently, Johns Creek is a seller’s market, although it’s experiencing some cooling, evident in the decreasing median list prices and the increasing number of homes for sale. Buyers looking in this area may have more advantages than in the past year.

Signs you’re ready

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Before buying your first home, look out for signs indicating you’re ready to undertake the process. Review your financial standing, research if you’re able to afford a down payment, and be aware of all the costs that come with owning a property before beginning your search.

Good financial standing  

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The first indication that you’re ready to buy your first home is if you’re in good financial standing. Having a stable income is a crucial component of this. Lenders will require proof of income, either through tax returns or pay stubs from the past two years, to ensure you can pay off a mortgage loan. Although you may feel secure in your current job, it’s also important to feel secure in the future. If you see yourself leaving your current position, or feel like your employer isn’t reliable long-term, then you may want to delay buying a home.

Also consider how much debt you’re currently managing, whether that’s debt from a credit card, student loans, auto loans, or others. If you have a handle on your debt, then you’re in a good position to buy a home. However, more debt can disqualify you from the best interest rates for a loan. A high or rising credit score is also important to show lenders you’re dependable, as well as to qualify for loans at all.

You can afford a down payment

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Another sign that you’re ready to search for Johns Creek real estate is if you can afford a down payment. Those looking for homes don’t always have to have 20% of the home’s purchase price at the ready. Depending on your loan selection, you can put as low as 3% down on a conventional loan, or 3.5% down on an FHA loan. Down payments average about 6%, which is manageable in most cases.

However, there are perks to putting down 20%. Those who put down less than 25% will have to pay for private mortgage insurance, which averages 0.5 to 2% of your loan’s amount. Additionally, putting down more saves you money on accumulated interest. With a median list price of $750,000, those searching for properties in Johns Creek can expect a 20% down payment to be $150,000, and a 6% down payment to be $45,000.

You know homeownership costs

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Being aware of additional homeownership costs is important in a successful and long-lasting first home purchase. Consider expenses like homeowners’ insurance, which is a common condition for a home loan, as well as property taxes. Prepare for costs related to the home’s sale as well, like closing costs related to attorney fees, lender fees, moving expenses, and title insurance.

Once you own your home, prepare for costs like all utilities, as well as maintenance costs if something happens to your property. Compared to the national average, buyers can expect things to be a little more expensive in Johns Creek. Housing prices are 5% higher than the national average, with mortgage rates 4.02% higher.

Signs you aren’t ready

There are a few signs to reflect on indicating you may not be ready to buy your first home. Not having an emergency fund can cause serious problems as a homeowner, while having future plans can make mortgage payments challenging. Additionally, if you aren’t comfortable with managing debt, then now may not be the time for you to invest in a first home.

You don’t have an emergency fund

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Any skilled real estate agent—like Susan Lombardo—can tell a buyer that not everything can be planned for beforehand. However, you should be prepared for the unexpected with an emergency fund. Having extra savings for problems that arise, as well as coverage for three months of living expenses, will save you from falling into debt.

You have future plans

A home is a long-term investment, and having big goals or plans for the future that pull you away from a home’s responsibilities may be a sign that now isn’t the time to buy Johns Creek real estate. Plans to travel, weddings, or costs related to a job or recreation may make it difficult to manage a mortgage payment or other sources of debt. And if you plan on moving within the next five years, it may be more cost-effective to rent.

You’re uncomfortable with debt

The costs of buying a home are steep, especially if you’ve never had to manage a mortgage before. Make sure you’re ready to manage your debt responsibly. Typically, it's best to keep home expenses below or at 30% of your monthly income. If a mortgage payment would exceed this percentage, you may want to postpone your home search.

Ready to start your home search?

There’s plenty to think about when starting your search for a first home, and with this advice, you can better determine if you’re ready to begin. If you need help looking for properties in Johns Creek, contact trusted local agent Susan Lombardo to guide you through the process.

*Header photo courtesy of Shutterstock

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