For most people, buying a house is the biggest financial commitment of their lives. Your property isn’t just an investment, but it is also the place you’ll spend the most time and possibly raise your children. To finance a house in Austin, Houston, or Dallas, Texas, you’ll have to first take a deep dive into your finances so you can figure out where you can afford to live and what kind of property you can buy.

Then, you’ll need to speak to a good mortgage lender who can show you what your options are and help you access the financial assistance you need. Don’t be lured in by attractively presented homes. Instead, always think about the underlying value of the property and get a comprehensive home inspection to find out whether there are any issues. At the moment, interest rates are still low, so now could be a great time to buy your dream house.

Buying a House: 8 Keys to Financing a New Home in Dallas, Houston, or Austin, Texas

1. Work Out How Much You Can Pay

When you start getting ready to buy a home, your first step is to analyze your finances and find out where you stand. Add up all your income, which might include money from your employer, any side jobs you have, investments, and gifts from family or friends. Then, have a look at what you’re spending each month. How much money is left at the end of the month after all your bills and payments?

This, plus what you’re currently spending on rent or your mortgage, is the amount you can spend on your new house every month. However, you should build a margin of safety into your budget because you’ll also have some extra expenses, such as your property taxes and your insurance. What’s more, you’ll no longer have a landlord who can pay for repairs to your property, so you’ll have to save up some money each month for maintenance.

2. Work Out How Much You Can Borrow

Almost everyone who buys a home puts down a deposit, which is a sum of money they pay immediately. Because most people can’t afford to pay for the entire home upfront, they also need to take out a mortgage. Before you can contact a mortgage lender, you need to have a look at your current financial situation to figure out how much you’ll be able to borrow. 

Usually, people can borrow up to 4.5 times their annual salary, so if you earn $50,000, you can borrow up to $250,000. If you want to buy a house that costs $300,000, you’ll have to save $50k to make up the difference. Although this rule of thumb works well in most cases, your circumstances might be different. For example, you might be able to borrow more if you have a lot of assets, but you might not be able to borrow as much if you have lots of debt.

3. Put Together a Deposit

Once you know approximately how much you can borrow, you can check what houses in your preferred area cost and then figure out how much of a deposit you need to save up. Many mortgage lenders only require a 5% deposit, but you’re likely to get a better rate if you can save up 10-30% of the property’s price. Because saving a lot of money in a short period of time can be a big challenge, some of the best mortgage lenders offer down payment assistance. 

4. Select a Good Mortgage Lender

Working with a good lender who will get you a deal that suits your needs is key. You should always look for someone who is local to your area since they’re likely to provide you with more personalized service. To get started, you can call or email Home Loans With Gary and Guaranteed Rate Affinity and ask for an appointment.

Bring as much documentation as you can to your initial consultation. The sooner we can review your assets, your income, and your liabilities, the faster we can get you the mortgage you need.

5. Learn About Various Types of Mortgages

After reviewing your financial details, your mortgage lender will explain the various options to you and recommend the mortgages that could best suit your situation. There are two key ways to finance a house in Dallas, Houston, or Austin, Texas. Fixed-rate mortgages have a set interest rate, so you know what you’ll be paying for the next few years. These can be a good idea if you believe that the interest rate is likely to rise in the future. 

You usually pay less for variable-rate mortgages, but if the country’s financial situation changes, the mortgage lender can change your interest rate. Therefore, they are considered riskier. Your lender might also speak to you about financial aid you can claim. For example, first-time homebuyers have certain advantages, and their loans might include closing costs and fees.

6. View Homes for Sale in Your Target Area

The next step is to start looking for the home you’d like to buy. Now that your mortgage lender has confirmed that you’ll be eligible for a mortgage, you know for sure which properties are within your price range. When looking for a home, it’s important not to be fooled by cosmetic factors, such as a shiny new coat of paint or a manicured front lawn. 

Instead, look at the underlying value of the house. Remember, you can always upgrade the property later, even if it looks rundown now. Buying a house that hasn’t yet been renovated is often cheaper than purchasing a property that has been done up by the seller. What’s more, this allows you to give the home your unique touch, so you’ll feel even more comfortable.

7. Don’t Forget the Inspection and Appraisal

You’ve found your dream house, and you can’t wait to move in. Why get a comprehensive home inspection? The property looks fine, and there are no obvious defaults. 
Unfortunately, this attitude can cost you tens of thousands of dollars. Structural issues aren’t always evident, and they can easily be hidden with cosmetic renovations. For this reason, you should always hire an inspector, who can check that the property is in good condition and alert you to any issues. Once you know what the flaws are and how much the home is realistically worth, you can decide whether it’s a good buy. 

8. Finance a House ASAP to Get the Best Rate

At the moment, inflation is high, salaries are stagnant, and interest rates are going up. For this reason, buying a home as soon as possible could be a good idea. That way, you can lock in the price, and you don’t have to worry about being priced out of your favorite neighborhood. Even if your salary doesn’t keep up with inflation, your biggest expense, your home, won’t go up. 

In Austin, Houston, or Dallas, Texas, buying a house is still affordable as long as you work with a good mortgage lender, who can show you what your options are and let you know whether you’re eligible for any financial assistance. Get in touch with us at Home Loans With Gary and Guaranteed Rate Affinity to find out how you can finance a house and apply for your mortgage. Our friendly team will be more than happy to help you.