There’s no denying that Houston, Texas has tons to offer its residents. The city is booming with life, which is a huge draw for occupants and those considering making a move to Houston. We are here to share with you our top financial tips that can help you purchase your Houston dream home.
Like any major life event, feeling prepared is key to making things go smoothly. Whether you’re a first-time homebuyer, or you are a seasoned real estate pro, getting financially prepared will make the entire process less stressful. Our best tips for preparing to buy a home in Houston include:
1) Save early – You need to consider your down payment (which is usually around 3 percent of the home sale price), and closing costs (which are typically 2 to 6 percent of the total loan amount). Another expense to remember are moving costs (this amount can vary widely depending on the number of items you’re moving and how far you are moving).
2) Know what you can afford – Another key to getting prepared financially to buy a home is to understand what you can actually afford. A trusted lender can help you with this, but also taking a look at your own personal finances can help give you an idea of what you can afford to purchase. A good rule of thumb to consider is the 28/36 rule which says you should spend no more than 28 percent of your gross monthly income on housing, and no more than 36 percent on debt payments.
3) Strengthen your credit – A large factor that affects your ability to get a mortgage loan is your credit score. To best prepare to make a purchase, you should work to strengthen your credit score. In order to execute this, you should first look at your credit report, be sure you are paying your bills on time, keep credit card balances low but keep all your current cards open, and track your progress utilizing a weekly reporting service.
Once you feel like you’re financially in a good place to make a home purchase; you should be sure to make smart financial choices along the way. Some tips we have to include:
- Research any first-time home buyer assistance programs your lender may offer (this can save you big bucks if you qualify!)
- Compare mortgage rates and fees
- Get your pre-approval letter before you begin reaching out to real estate agents, and before you go look at any property
- Stick to your personal budget before taking on a loan your lender says you can afford (sometimes lenders offer more than you are personally comfortable with paying)
We hope you feel better prepared to tackle the financial work it takes to purchase a home in Houston, Texas. Being prepared before you take a deep dive into the real estate market is key to feeling financially comfortable.
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