7 Steps To Take Prior To Buy Your First Texas Home
One of the most significant milestones in many people’s journey into adulthood is buying a home.
One of the things that you should start off doing is checking your credit. If you have a credit card, you might be able to check through your provider. If not, you can always get a free credit report. When checking, if you find issues that hinder your score, you will be punished with having a higher interest rate. If you find any inconsistencies or wrong accounts linked to your credit, you will want to get full documentation to dispute it. Mortgage companies will always take this into account when they are looking to decide whether or not to provide you with financing. If you don’t have a favorable rating, you want to look for ways to improve it prior to even getting started with the buying process. By raising your credit even a few points, you will be able to drastically improve your rates.
2. Budget Analysis
Understand the numbers. You want to factor in the total amount you have available to spend. Think about everything from how much you are spending on rent, debt, and other fixed costs that you have. While you might believe you can pay for a mortgage, it’s important to go into the process knowing you can. By examining your paycheck and where it is going, you will be able to see where you can improve your budgeting and you will be able to make adjustments to correct issues.
3. Debt Percentage
When you are examining your debt percentage, you want to look to see if you meet the qualifying criteria. A mortgage company is likely going to require that you have 33 percent of your monthly income that you can devote to the cost of the mortgage. Whereas, 38 percent can include consumer debt. If you aren’t within this range, you are likely not going to qualify.
4. Your Down payment
The mortgage company will look very closely at your down payment and its source. They will look at everything from bank statements to money being transferred in and out of your accounts. Because of this, you want to ensure that you are not spending money gifted from friends or family instantly. Rather, you will want to wait for it for a long period of time. The company will also want to be certain that you have the funds available, but also that you are able to cover any and all of the closing costs associated with the sale.
5. Know The Other Costs
When you are looking to purchase a home, you want to be familiar with the other costs that are involved with the home buying process. It’s important that you have considered them. While you might have been paying rent on a monthly basis, you will be taking on a lot of additional costs including but not limited to real estate taxes, a potential association maintenance fee, utilities, homeowner’s insurance, and annual maintenance and repair costs. These costs are likely to be brand new to you have never been a homeowner.
6. Interest Rate & Mortgage
When you enter any mortgage site, you will be presented with so many choices it will make your head spin. Not only will you see different types of rates, but you will also see varying lengths and more. Along with this, you will have to figure out whether you want to lock the rate in or allow it to float throughout.
7. Local Market
You need to understand your local housing market in the area where you are looking to buy. If homes are at an all-time high and the bids are skyrocketing, be wary of jumping in. Housing prices are in a constant state of flux and by purchasing at the wrong time, you can be costing yourself thousands.