Don’t Start Your Houston Home Search Until You Do These 7 Things
Are you feeling the itch to start your Houston home search and become a homeowner? It can be tempting to jump online and start wading through the Houston houses on the market to find the home of your dreams. However, there are a number of factors that go into buying a Houston house and it helps the process move along when you do them in the right order.
Use this checklist before you start your Houston home search.
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Determine if You are Ready
Unfortunately just because you decide you want to buy a Houston house does not mean that you are financially ready to do so. There are online calculators that can help you determine if you are financially ready to start a home search.
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Look into Your Credit
Your credit score plays a major role in your ability to be approved for a loan and helps determine the interest rate you will be paying. Therefore you should look into your credit score and credit report long before you start to look for houses.
If your score is lower than 620 you will want to work to start raising it. Make sure you are making payments on time and work to pay down your balances.
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Educate Yourself
There are a number of steps that go into buying a Houston house. Buyers who do the best are educated on the process and know what to expect.
If you have never been through the process before, don’t worry there are a plenty of ways to get educated. Many mortgage brokers, real estate associations, banks, and libraries offer seminars to educate first-time Houston homebuyers.
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Pull Together a Down Payment
Most lenders require buyers to make a down payment on their mortgage. This is typically anywhere from 5% to 20% of the total mortgage. This can be a time-consuming process for many people.
If you don’t want to wait to save the money for a down payment talk to your mortgage lender. There are some programs that could reduce the down payment if you qualify or talk to a tax consultant about the option of withdrawing funds from your 401K or retirement account.
Or, if you have friends or family that are willing to gift you the funds you can quickly come up with a down payment.
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Compare Mortgages
Most people think of the traditional 30-year fixed rate mortgage when they think about obtaining a mortgage. However, there are several different options and a different one might be a better decision for you.
Talk to several mortgage lenders to find one that you work well with and is considering what is in your best interest.
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Don’t Forget about Closing Costs
Most Houston buyers consider the funds they need for a down payment, but many fail to think about the closing costs. They are not as easy to predict because who pays what between the buyer and seller is somewhat negotiable. However, they can total 3% to 6% of the sales price.
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Consider what Could Happen Down the Road
Once you become a homeowner you will be responsible for maintaining the house and property. Make sure that you budget for these additional expenses. You will not regret keeping a savings account to cover any household emergencies that arise.
Once you have started working through this checklist you can start your Houston home search. With your professionals in place you will have a good idea of how much you can afford to spend and what you will likely be approved for. The work you do before will help you enjoy the buying process more.