There are few things more exciting in life than deciding it’s time to buy your first home. It is a major step in anyone’s life, whether you’re newlyweds looking to put down roots or if it’s time to start raising a family and you need to move out of an apartment or condo and into a single-family home with plenty of space.
There are many factors to consider before making the final decision to buy Old Lake Highlands real estate. For instance, there’s the simple matter of financing. The price of housing has been going up, and there are many costs first-time homebuyers will have to account for, such as a down payment, a homeowners insurance policy, and property taxes. You also must budget for recurring costs such as utilities and various maintenance costs, and you’ll need to have money on hand in case of an emergency.
The market
The first thing you need to consider is that the median price of Old Lake Highlands real estate is $595,000. Nicer luxury homes in this comfortable community in east Dallas can go for seven figures. The market favors sellers, so buyers have to be willing to compete for homes they fall in love with, including sometimes making an offer for more than the listing price. They also often have to submit clean offers, meaning they can’t ask for certain contingencies.
Hire a real estate agent
Perhaps the best way to get advice for first-time home buyers is to hire a licensed real estate agent who has several years of experience in helping clients get into homes in this wonderful neighborhood. As a first-time homebuyer, you will have so many questions that you can feel overwhelmed and maybe even a little bit lost. But once you hire an expert agent, like Albany Shaw, you will be able to take a deep breath and begin the process that will culminate with that exhilarating feeling of owning your own home.
Have a steady income
One of the most important factors for first-time home buyers is to have a steady income to cover the cost of a monthly mortgage payment as well as all of the other costs associated with buying your first home.
By the time you’ve decided you want to jump into the market, you should have already started saving as much money as you can every month to afford a down payment, closing costs, and other costs. You should also be working to attain the best credit score possible, so pay off debts such as car loans, student loans, and credit card debt. This will be important when it comes time to shop for a mortgage. The better your credit score and other financial factors, the lower the interest rate you’ll qualify for.
Another factor to consider at this point is if you are committed to staying in the home for at least five years. If you plan to begin raising a family or need more space, then you almost certainly will want to stay in your first house long-term. If you can’t commit to staying in a home for five years or more, it doesn’t make sense to make the financial commitment. There are various rent vs. buy calculators that will help you determine if it is indeed time to buy your first home.
Set a budget
The next major decision first-time homebuyers must make is how much they can afford to spend on a home. It’s great to have a wish list of what you want in a home, such as square footage, number of bedrooms, and amenities and features, but you need to be realistic and know how much money you can spend.
Mortgage experts advise using the 28/36 rule, which means you should spend only 28% of your gross monthly income on mortgage payments and 36% on your total debt. Knowing those numbers will start to give you an idea of what price range you can shop for. Besides figuring out how much of a monthly mortgage payment you can make, you must also have money on hand for certain closing costs. Your talented agent will go over a list of what you will be responsible for.
You can plug figures into a mortgage calculator to arrive at a figure that you are comfortable paying. You should visit a handful of lenders to shop for the best interest rates and terms.
Know your down payment
Traditionally, home buyers have had to make a down payment of 20% of the purchase price. While that may be true in many cases, some mortgage programs allow purchasers to put down as little as 3%. You will be able to get an exact figure from your mortgage loan officer. It can be hard for some first-time home buyers to come up with a down payment, so they might need to borrow that money from family or friends.
Remember that the more you put down, the less interest you will pay over the life of the loan. First-time homebuyers who put down less than 20% must pay private mortgage insurance or PMI. This protects the lender in case you default on the loan. The cost of the PMI is added to your monthly mortgage payment. If you are worried about not being able to afford a certain sized home, lower your expectations a bit and look for homes that are a bit smaller and therefore have a smaller price tag.
Make the deal
These are the main points to consider when pondering whether it’s time to buy your first time. If you decide it is indeed time to begin the exciting process of shopping for Old Lake Highlands real estate, let Albany Shaw show you why she is one of the top-producing agents in the Dallas market.
