As you progress in your professional life, you accumulate more savings over time. Most financial experts recommend investing these finances into something that yields high returns. After all, you must make your money work for you if you want to achieve financial freedom. Financial freedom isn’t attainable without smart investments because you can’t work non-stop. Stocks, options, and real estate are particularly popular investment options for most people, and rightfully so, because they generate good investment returns.
However, real estate has always been the go-to choice for most people because land has always been a scarce commodity. Thus, people purchase properties to serve as primary or secondary residences or rent them out for a constant revenue source.
Most people dabbling in real estate for the first time usually fall into the first category. They’re looking to invest in their futures by purchasing a property and using it as a primary residence.
The current national economic climate has many people reconsidering their futures. Inflation is skyrocketing, leading to the cost of living becoming unbearable for many people in some states. For instance, the California exodus continues to power on despite peaking during the COVID-19 pandemic. Many people are looking for a more affordable state with lower tax levels. That’s where Texas enters the mix.
Texas cities like Austin, Houston, and Dallas have emerged as particularly attractive places to live. The influx of people moving to these cities has also made them attractive real estate markets. Dallas has particularly become popular because the city’s property prices are affordable while generating excellent returns on investment. If you’re considering moving to Dallas and purchasing a property there, this article will assist you since it has some helpful tips.
Create a Budget
The first thing you need to do when investing in real estate is formulating a budget. You’ll want to save as much as possible for your down payment. However, that’s not all. You’ll also need to calculate how much you can spend each month on mortgage payments after you’ve purchased your home.
Start by calculating your monthly income. If you’re buying a home with your significant other, and they’ll also be contributing, calculate your combined income after taxes. Then, deduct monthly expenses for food, insurance, utilities, etc. Once you’ve calculated all of this, you’ll be left with a figure you can attribute to mortgage payments, property taxes, and homeowner insurance.
Ensure you do your due diligence and create a strict budget. First-time homebuyers often go over budget because they don’t account for closing or moving costs or any repairs their new real estate purchase might require.
Start Saving Up Early
According to research, the average home price in Dallas, TX, in August 2023 was $479,900. That’s a significant sum for most people. A primary residence is the most important investment most people make in their lifetimes. Moreover, you’ll need to save up for a down payment if you’re getting a mortgage.
Lower down payments result in higher monthly mortgage rates, straining your finances. Therefore, start saving up early so you can put a higher down payment and reduce your monthly rates. It’ll benefit you in the long run.
Find the Best Mortgage Rates
Getting a mortgage is a crucial part of the home-buying process. According to research, only 34 percent of Americans fully own their homes. This figure indicates that 66 percent of the US population uses mortgages and loans to fund their home purchase.
You have various financing options. For instance, the Federal Housing Administration provides loans to homebuyers and allows down payments as low as 3.5 percent. However, these loans are primarily for low-to-middle-income families, so you might not qualify if your income exceeds the threshold.
In addition to FHA loans, other options exist. Conventional bank mortgages generally require higher down payments. These mortgages also scrutinize credit scores and financial information more diligently.
Prospective buyers looking to purchase rural or farm property can also apply for USDA loans. Similarly, military veterans can also qualify for Veterans Administration Loans.
Get Pre-Approved for a Mortgage
House hunting requires acting immediately. Otherwise, you might miss out on your preferred home because you couldn’t arrange the funds timely. Most mortgages take between 30 to 90 days to process.
Getting pre-approved from a lender can help you get a leg up in a competitive market. The pre-approval process involves lenders examining and verifying your financial information before deciding how much you can borrow. The process generally takes seven to ten days, after which the lender will give you a pre-approval letter.
You can show sellers this letter to prove you have serious intentions of purchasing the property.
Devise a List of What You Want from Your Home
A home is an investment. Most first-time homebuyers plan to use their new purchase as their primary residence. As a result, they have a specific list of needs and wants from their home.
Ideally, your first home should have everything you want. However, that’s not always the case. As a buyer, you have to be realistic. For instance, if your budget is half a million dollars, you might not be able to get all the luxurious amenities you wanted in your dream home, like a dedicated home theatre or a temperature-controlled swimming pool.
Creating a list of what you want from your home can make things easier. Dividing the list into needs and wants helps because you can overlook a property not having everything you wanted as long as it meets all your needs.
Once you’ve created the criteria for your first home, start looking at types of homes and neighborhoods. Do you want to go for a condominium or a townhome? These homes are cheaper than single-family homes but have less privacy.
Your property’s location will also affect its price. For instance, research shows homes in neighborhoods with high-scoring schools cost more than homes in neighborhoods with lower-rated schools.
Find a Reliable Real Estate Agent
The right real estate agent can make your life easier when house hunting. They’ll scour the market to find homes that meet your needs and wants. In addition, they’ll also assist you every step of the way, from negotiations to closing.
Don’t go with the first real estate agent you find. The internet is your friend because it can help you find some of the best real estate agents based on customer reviews. Another option is to ask your friends and family members. If they’ve recently purchased or sold a house, they could connect you with their real estate agent.
Purchasing a home for the first time requires careful consideration and due diligence. However, following the tips listed in this article will make it easier for you to find an excellent property in a thriving real estate market like Dallas. Happy House Hunting, and Congratulations on finally being able to own a home!