Buying a house is a big decision. In contrast to tenants who pay monthly rent, homeowners are responsible for any repairs, upgrades, and renovations they wish to make to a property. Additional costs such as insurance and local property taxes can surprise first-time buyers.
More than 300,000 homes were sold in Texas in 2020, a nearly 10% increase from 2019. Despite the 2020 economic shutdown caused by COVID-19, nearly $38 billion was spent on constructing new single-family homes. The value of single-family private construction increased by nearly 14 percent.
Are you ready to buy a house in Texas?
Buyers should consider their budget and how long they intend to stay in the area before purchasing a home. The average price of a home in Texas ranges from $224,500 to $339,900. In 2019, the state’s median home price increased by nearly 8%, with a significant portion of the growth occurring in central Texas near Austin and San Antonio. Closing costs, broker fees, appraisal fees, and mortgage origination fees, in addition to the down payment, can add 2-5 percent to the total cost of the loan.
Requirements
First-time homebuyers frequently use FHA loans with credit scores around 580. Adults should ideally have credit scores of at least 620 and debt-to-income ratios of 28 to 31 percent. A down payment of at least 20% of the total property value can also result in a lower interest rate. There are, however, options for buyers who cannot make 20% down payments, have low credit scores, or have high debt-to-income ratios.
Obtain Pre-approval
You will be required to apply with your personal information during the mortgage pre-approval process. Lenders may confirm this information by contacting your current employer to verify your work history, authenticating your current assets, and contacting any of the three credit reporting agencies to determine your credit score.
Start Looking for a House
There are numerous ways to find your ideal home. Many people start their searches online to become acquainted with the current market and explore different neighborhoods. The next step is to hire a real estate agent to assist them in narrowing their options.
Anyone looking for a home should list important qualities and show it to their real estate agent or keep it nearby while browsing online. They should consider the overall cost, size, square footage, number of bedrooms and bathrooms, overall condition, potential repairs or renovations, location, neighborhood, school district, property taxes, size of the front and back yards, and other factors. It is critical to maintain patience throughout this process. You might need to look at a few houses before deciding on one.
Make a proposal
When you’ve found the perfect home, make a written offer with your desired price, an earnest money deposit, usually 1-2 percent of the total cost, and a deadline for the seller to respond. They should handle this for you if you’ve hired a real estate agent.
If the seller refuses to negotiate the price you want, don’t be afraid to walk away. There are many available homes to choose from, and staying within your budget will save you money in the long run.
Arrange for a home inspection and appraisal
A certified inspector will inspect a home for electrical, roofing, appliance, or structural issues. You will be given a list of these issues, and any significant issues or cleaning services needed should be discussed with the seller before closing. If multiple repairs are required, buyers can request a price reduction, or the seller can fix the problems or cover some closing costs.
Before receiving a mortgage loan, a home appraisal is just as necessary as an inspection. This will determine the property’s current value. Buyers should always conduct a final walkthrough to ensure that the seller has resolved any agreed-upon issues and that nothing has been overlooked.
Closing
A buyer should bring a valid form of identification, proof of funds, and other necessary documentation to a closing meeting. Before signing the mortgage note and deed, they will be asked to carefully read the closing disclosure, verifying the loan estimate and settlement statement. The home-buying process may appear lengthy and complicated, but education and preparation can assist Texas residents in finding the best homes for their needs.