The Home Buying Process: A Guide For
First Time Buyers in TX
Buying your first home
should be a time of excitement and looking forward to new beginnings. Despite
the horror stories of the not-too-distant housing market upheavals, the home
buying process for first-time buyers doesn’t have to be fraught with anxiety
and fear of the unknown. That’s why we’ve created this brief guide for first
time buyers in TX. Every state has their own rules, guidelines, and laws so TX
can be different that buying a house in another state.
Determine What You Can Really Afford
Sometimes, in the
excitement of getting out from under rent payments to own your own home, it’s
easy to forget this critical consideration – what you can actually afford. What
your bank or mortgage company is willing to lend you isn’t always the deciding
factor for how much home you can afford.
Generally, mortgage
payments should not be greater than 28% of your monthly gross income. But you
also need to take into account other monthly payments such as for a car, credit
card debt, student loan payments, and so on. You also need enough in savings
for repairs to your new house and for all those other inevitable life
emergencies.
Figure Out the Right Kind of Mortgage
No guide for first
time buyers in TX would be complete without advising you to carefully choose
the best mortgage for your unique situation. A good mortgage lender will help
you in that process. They know the Debt to Income Ratios (DTI) that
apply for a loan and what types of loans are available in the area you want to
buy. Once you’ve determined what you can really afford, you should look
carefully at the different kinds of mortgages available.
What is the right choice?
The two most common
kinds are the fixed rate mortgage and the adjustable rate mortgage (ARM). With
a fixed rate mortgage, just as the name suggests, your interest rate remains
fixed throughout the life of the loan. An ARM, on the other hand, is a mortgage
with adjustable or fluctuating interest rates that change to parallel market
changes. An ARM, usually begins with a very low-interest rate, so it’s a good
option for people who don’t intend to live in the house for a long time.
But it can be tricky as the rate or payments goes up after a set number of
years. If you think you do not plan to stay in the home that long, it
might be a good option but if for some reason you fail to be able to move the
payment may be become higher than you can afford. So that is a loan you
have to approach with care. A good lender can explain that in better
detail. Your agent has worked with different lenders over the years
and can refer you to a number of good lenders to speak to.
Decide What Features You Want
This next section of
our guide for first time buyers in TX is meant to save you much time in your
house hunting and dissatisfaction after the purchase. Before you ever start
looking at listings, you should have a pretty clear idea 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. The other major factor is that if you have gone through
the loan application process you know the maximum amount you can spend.
That will save time looking at houses above your price range and the possible
disappointment you might have looking at a home you cannot afford.
Get an Agent and Start Looking
Then, when you really
get serious about looking for that first home, as any guide for first time
buyers in TX will tell you, you should consider working with a real estate
agent. An agent can get you access to more homes and more options and can set
up the viewing appointments for you. An agent can also serve as a valuable mediator
between you and the seller when it comes to negotiations – which means that she
can save you money in the long run. Agents are trained to navigate the
whole process: from locating homes you would like to getting you to the
closing table. And that can be a complicated process based upon
numerous factors from pricing of house, how “hot” the market is,
condition of house and repairs that might be needed. An agent guides you
through the price to offer to getting inspections done, to reviewing all the paperwork
from title commitment to the survey and negotiating any items that are
required.
Make Your Offer
Finally, when 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. And this is where things get a
little tricky. You don’t want to come in too low and risk losing the house, but
you don’t want to pay more than you have to either. Making an offer is the part
of the process where your agent can be a huge asset.
Following the tips in
this guide for first time buyers in TX should remove much of the uncertainty
and help you avoid many of the pitfalls in the process. But that final stage of
reviewing the documents and signing the papers at closing still remains. And at
that stage, it’s a good idea to call on the expertise of a real estate
professional – before taking that final irreversible step.
DISCOVER HOW WE CAN HELP
MAKE THE PROCESS EASIER BY CALLING
(210) 216-7722