Buying your first home should be a time of excitement for new beginnings. The process for first-time home buyers doesn’t have to be filled with anxiety and fear of the unknown. That’s why we’ve created this brief guide for first time buyers in Texas.
Determine What You Can Really Afford
In the midst of the excitement of owning your own home, it’s easy to forget what you can actually afford. The amount that your bank or mortgage company is willing to lend you isn’t always the deciding factor for how much you can afford.
Mortgage payments typically shouldn’t be greater than 28% of your monthly gross income. You should also consider other monthly payments such as for a car, credit card, student loans, and so on. You also need enough in savings to repair your new house and for life emergencies.
Figure Out the Right Kind of Mortgage
A guide for first time buyers wouldn’t be complete without advising you to carefully look at and choose the best mortgage for your unique situation (once you know what you can afford).
Fixed rate mortgage and adjustable rate mortgage (ARM) are the two most common kinds. With a fixed rate mortgage, your interest rate remains fixed throughout the life of the loan. On the other hand, an ARM is a mortgage with interest rates that change to parallel market changes. An ARM typically starts with a low interest rate, so it’s a good option for people who don’t plan on living in the house for long.
Decide What Features You Want
This next section is meant to help you save time house hunting, and reduce dissatisfaction after the purchase. Before looking at listings, you should have a clear vision of what you want in a home – number of bedrooms and bathrooms, total square footage, personality of the neighborhood, proximity to schools and shopping, style of house (ranch or Victorian, for instance), carpet or hardwood floors, and all the many other considerations.
Get an Agent and Start Looking
As any guide for first time buyers will tell you, once you become serious about finding your first home, you should consider working with a real estate agent. They have access to more homes and can also set up the viewing appointments for you. When it comes to negotiating, an agent can also serve as a valuable mediator between you and the seller – which means that they can save you money in the long run.
Make Your Offer
Once you’ve found the perfect house – the one that meets all your criteria and falls within your price range – it’s time to make an offer. Things get a little tricky here. You don’t want to offer too low and risk losing the house, but you don’t want to pay more than necessary either. This is where having an agent can be a huge asset.
Following this guide for first time buyers in Texas should remove much of the uncertainty and help you avoid pitfalls in the process. The final stage of reviewing the documents and signing the papers at closing still remains. At that stage, it’s a good idea to call on the expertise of a real estate professional – before taking that final irreversible step.