Since I became a Texas real estate agent, I have been helping first-time home buyers achieve the dream. This is the most rewarding and enjoyable part of my job. Helping people build wealth through real estate is what I do, but that first home is so important.
Why you should buy a home soon as possible in Dallas:
The primary residence is the foundation upon which most Americans build for retirement. That's because your home is the best investment you can make for many reasons.
Paying rent IS buying a home- for your landlord. Unlike rent, every monthly mortgage payment reduces what is owed, until one day- you have no mortgage payment - only taxes and insurance. And it may not take 30 years - a few early extra payments can knock years off.
With rents rising in DFW, you may save monthly by purchasing a home. However, the REAL money in owning a home is in long-term tax-free appreciation. Gains on your primary residence are exempt from capital gains taxes (up to $250k single, $500k married). To qualify, you must live there 2 out of the last 5 years before you sell.
Long term, owning real estate is a sure thing because they don't make any more of it. Homes have appreciated on average 3-4% per year over the last 70 years. It's your best hedge against inflation.
This will make you smack your forehead if you haven't purchased a home yet... The median existing home price in Dallas County has risen over 260% in 10 years! If you had purchased at the bottom of the market and timed it perfectly, a median priced home would have added well over a hundred thousand dollars to your net worth since then.
The #1 reason to buy a home now is low mortgage interest rates. Rates are not far from the all-time low, making this a once-in-a-lifetime opportunity to lock in low payments and qualify for more home. It can't last forever. Don't miss this opportunity!
How Much Money You Need to Buy a Home
Your next month's rent may be ALL you need to buy a home. I recently helped a first-time home buyer, who needed only 3.5% down payment with help from FHA loans. The seller paid all of her closing costs. She bought a home for less than $1500 out of pocket, including a home inspection.
Qualifying for a loan has gotten easier and there are zero/low-down payment programs available again. Cash required depends on the financing program you qualify for. You'll need the normal $3000 earnest money deposit to make an offer on a $300,000 home, which will be credited toward closing. Typical buyer closing costs with a loan are about 3% of the purchase price, including reserves for taxes and insurance. Sellers can pay buyer closing costs, but it's not easy to work into the deal in this hot market.
Now let's talk about down payments for various loan programs:
VA Loans are zero down with no monthly mortgage insurance, which saves the buyer hundreds per year, compared to other low-down financing options. I have helped many veterans get closing costs paid and ALL of the earnest money back at closing, costing the buyer nothing out of pocket.
FHA loans are the easiest to qualify for (credit score 620+), making this the most common program used by home buyers today. FHA requires 3.5% down payment, which can be a gift from family or be borrowed in some cases.
Conventional (non-government) Loans require as little as $500 down with golden credit, but most home buyers will need 3-5% down payment. This depends on the condition of the home, price range and other factors in an ever-changing mortgage market.
Physician loans: These loans are available to the medical professionals and require zero or minimal down payment and no PMI. Loans are available up to $1,000,000.
Buying a Home- Step #1 Get Qualified For Loan
Are you even in the ballpark? I can refer you to a reputable local lender. For little more than an hour of your time and the cost of a credit report, a lender can tell you exactly what your options are in financing a home purchase. Before you look at any homes, you need to know:
If you qualify and if not, what you need to do.
Which loan programs you AND the home must qualify for
How much you'll need for down payment/closing costs to complete the purchase
The price range of homes you can buy with a comfortable payment
Get proof you qualify. Having a pre-qualification or pre-approval letter from your lender not only prevents you from wasting time on homes you can't buy, but also puts you in the strongest bargaining position with sellers. Many sellers in DFW will not even consider your offer without proof of qualification, including foreclosed homes. Take the first step and get pre-qualified.
Qualifying For a Home Loan- The Basics
Who is on your side in a real estate transaction?
The lender? Maybe. The company exists to make money by originating loans, although your loan officer might be personally sympathetic to your interests.
The Title Company? No- impartial as a neutral 3rd party with equal obligations to buyer and seller.
The listing agent? No- most likely under contract to represent the seller, possibly able to partially represent both sides, but never fully and exclusively for the buyer.
An agent working with the buyer? You might assume so, but not without a contract for representation. In Texas, only signing an Exclusive Buyer Representation Agreement holds your agent to the highest legal standard in representing your interests.
See my article Why Use A Buyer's Agent.
Learn more about buying a home in North Texas and the home-buying process on my website: See my Blog, my monthly newsletters for more details on North Texas real estate, housing markets, supply & demand levels and much more.
Want help finding the ideal home? Describe Your Dream Home for Nitin and he'll find it for you.
How We Help You Buy a First Home
You need a top Dallas real estate team to work hard for you and guide you through the process. Our Realtors are devoted to helping our clients find the right home, at the best price, and with a minimal amount of stress and disruption to their lives. Our goal is to find the home that will make you happy and successful in real estate ownership.
When you hire us to help you buy your first home, we want to know what you want and how much you can afford. Your Realtor will find a way to merge these two priorities and find a residence you will enjoy owning for years. Starting with the first interview determining your requirements to the moment we present the keys to your first home, your Realtor will walk you through the complicated home-buying process. We will share our expertise to educate you on the market and the process of buying a home, so you will be prepared to make the best choices and feel comfortable with all of your decisions. Please contact us to find out more about how we can make the home buying process easier for you.
If you are planning to buy your first home in cities like Frisco,TX, Plano TX, McKinney TX, Allen TX, Plano TX, Coppell TX or Southlake TX, contact us. Our excellent New Builder Home Real Estate Services provided by top Real Estate Agents will make buying your first home much easier and will make your Dallas TX relocation less stressful! Check out our Dallas Relocation Resources at http://www.nitinguptadfw.com/dallas-relocation-real-estate-agent