Buying your first home (or second or third) is such an exciting time in one’s life! Owning your own home is a huge accomplishment, but like any major decision there can be a ton of questions. Below I’ve listed some of the most common questions I hear along with corresponding answers.
1. How much home can I afford? Depending on the type of financing you choose you typically do not what to spend more than 28-30% of your monthly income towards your mortgage payment. Another rule of thumb is to purchase a home anywhere between 1.5 -2.5 times the amount of money you earn in a year.
2. How soon do I need to start looking for a home? My general rule of thumb is at least 3 months before you would need to move in. This would give you plenty of time to take a look at the homes available and securing financing without feeling rushed.
3. What if I don’t have 20% to put as a down-payment on a home? With FHA loans you can put down as little as 3.5% and with VA loans you can purchase a home with 0 down. There are many options to purchasing a home without having to put in 20% equity right off the bat.
4. Why is owning better than renting? The are many benefits of owning over renting. With owning a home you’re building equity in an investment and there are also many tax benefits to homeownership. Also, even though the market is cyclical, over the years real estate does consistently appreciate.
5. Do I have to pay for a real estate agent? Typically in Texas the seller is the one to pay for both the listing and the buying agent, so as a buyer you will likely get the help of an expert at no cost.
Do you have more questions? Find answers here.