Owning a home is part of the American Dream! Home ownership can help families build wealth because mortgage payments build equity, whereas, rent payments do not. There is a certain pride that comes with home ownership, signifying a sense of stability and security for your family. Even though home markets wax and wane, over time, the value of your home will often increase, so you can sell your home for MORE than you purchased it for! Whether you’re planning to buy a home in 2020 or further down the road, here are a few tips to keep in mind as you work toward your goal.
1. Pay Off Debt and Build an Emergency Fund.
Dave Ramsey, a well-known financial guru, suggests that in order to reach financial freedom, you must first pay off all of your debts and build up an emergency fund. This is a great first step if you are planning to purchase a home because in order to succeed, you must focus on a realistic budget.
2. Start Saving for a Down Payment Early.
The more money you put toward the down payment, the less you will pay in interest over the course of your mortgage. A good way to get started, once you’ve paid off your debts, is to put whatever amount you were paying toward debt into a dedicated savings account.
3. Explore your Down Payment and Mortgage Options.
There are quite a few mortgage options for first-time home buyers that allow you to purchase a home for as little as a 3% or 3.5% down payment. Some VA loans may not require a down payment. Be sure to review your options thoroughly; Nerd Wallet has some great tips on exploring mortgage options here.
4. Get Pre-Approved Before your Start your Home Search.
Pre-approval for a home loan is a great way for first time home buyers to to understand how much they can afford to spend on a house. Getting pre-approved requires you to go to a mortgage lender and provide them with a few documents stating your income, assets, debts, etc. Any mortgage lender should be happy to walk you through the process of pre-approval.
5. Find the Right Real Estate Agent.
Your real estate agent should understand your needs AND the community in which you would like to buy a home. NextHome Tropicana Realty’s team is knowledgeable about the Central Texas area and skilled in working with each client’s specific needs. If you would like to speak to a member of the NextHome Tropicana Realty team, please call us at (254) 535-0277. We’re here to help you get started on your journey toward buying a home.