jennine_hunter@ucbi.com
NMLS# 1780411
Fear
The first reason why renters struggle to transition to homeownership is fear. They believe they will be rejected due to income, credit, down payment, job history, or, possibly, criminal background. But in many situations, this isn’t true. The key to finding out where you stand is to talk with a housing counselor or mortgage professional who can help you achieve your dream of homeownership. I’m currently working with a couple who had been renting for years until the home was sold out from under them. They were apprehensive about purchasing due to their debt—student loans, car payments, and credit cards. We began the process three months ago, and this weekend, they are going under contract for their new home! If they had continued to operate in fear, they would have continued to rent and never built wealth for their family. Talk to someone!
Credit
As mentioned before, the “fear” of needing a credit score over 700 prevents many renters from purchasing. A little-known secret is that all government loans only require a credit score of 580 to get started! Most renters want to clean up their credit on their own or through a credit repair provider—neither of which can get them mortgage credit ready. The best way is to find a housing counselor or mortgage lender who can advise how to improve your credit to help you qualify for the programs—Conventional, VA, FHA, and USDA. I provide many of my renters with a credit plan that tells them the timeframe and cash needed to achieve their optimal mortgage credit score. All of those buyers have achieved homeownership.
Purchase Price and Interest Rates
In Metro Atlanta, the average sales price is between 350k and 400k. Many renters struggle because they remember when those same homes cost 100–200k or less. Unfortunately, the area has only continued to grow and gain popularity. Atlanta sits at the intersection of three interstates, it’s now called the Hollywood of the South, and huge data centers are being built. All this growth is going to bring an increase in purchase prices, and on top of that, we’re in a housing shortage. As far as interest rates, we’re in a normal rate environment with 6–8%. Most renters want to argue about a 6% rate on a home mortgage—but what they don’t realize is that the mortgage interest is tax-deductible, and they’re already paying 100% on a rental lease without that mortgage deduction. Not to mention the high interest rates on their credit cards and car notes—most of which are in the double digits. If you don’t believe me—check the rates on those cars and cards and let’s have a conversation!
Social Media
Finally, social media and regular media are telling renters that now is not a good time to buy. Unfortunately, a lot of the influencers are not real estate professionals, and they’re making general statements based on their views and not a renter’s actual current financial status. Because these individuals are celebrities or have a large following, renters are taking their views as truth and not taking the time to research and verify if the advice is relevant to their situations. Again, let’s talk!
I’ve highlighted several struggles that many renters have experienced—but you must have the courage to face those fears and move into homeownership. Don’t let it scare you into renting forever. Some renters have already been priced out of the market by waiting too long—and more are soon to follow.
