First Time Home Buyer

5 Tips for Buying a Home in Killeen, TX

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.

 

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Stages of Buying a Home in Texas

For a first-time home buyer, the home buying process in Texas can appear intimidating. There is loan pre-approval, finding the right neighborhood, house hunting, home inspection, and many smaller steps that can easily overwhelm you. We want the home buying process to be as easy as possible for you, so we’ve put together a list of what to expect during the process of buying a home.

Get Pre-Approved for a Home Loan

You can be pre-qualified for a mortgage loan and apply for your home loan. Even if you are not qualified right now, the right loan officer will explain the steps you need to take to get there. Typically, the qualification process takes between 3 and 12 months. To get pre-approved for a home loan, you will fill out the loan application and submit supporting documents (such as your tax returns, bank statements, etc.). Once the loan is in process, you can get out those comfortable shoes and start looking at homes.

Search for Your Next Home

It is time for house hunting! Aside from closing day, house hunting is the most fun part of the home buying process. There are so many options available for exploration and you get to choose exactly the option that will work best for you and your family. NextHome realtors are here to guide you through your decision making process. Here are some questions to help you figure out which one will be the right home for you:

  • What area of town is ideal for your commute?
  • What neighborhood amenities are you looking for?
  • Do you prefer new construction or a resale home?
  • Where are the best schools?

Submit Your Offer

Once the house is found, it’s time for negotiation! Armed with the latest neighborhood information, NextHome Tropicana realtors guide you to make the right offer and submit it to the seller. Negotiation may require some back and forth as you discuss the details with the seller.

The negotiable details could include both the cost of the home, as well as things like: who pays for the home warranty, closing costs, title insurance, and more. Once everything is agreed upon, the offer becomes a contract. To seal the deal, some sellers require a deposit called earnest money sent to the title company. This shows your good faith in the transaction, which allows the sale to move to the next step.

Get a Home Inspection

A home inspection is essential for you to know exactly what you’re getting into. The inspector helps you identify any issues that the property might have. It’s conducted by a third party independent licensed inspector, and it is a must-do. A home is likely to be the largest purchase you will make, you want to scrutinize it and ensure that everything is up to par. If any repairs are needed, you can use that information to negotiate with the seller while the contract is in an option period. The option period is a short time frame, typically 10-15 days, after the contract is ratified.

Loan Processing

This is the hardest part of the process only because you are anxiously awaiting the green light to get into the house. During this time, quite a few things take place behind the scenes. These include the home appraisal, survey, title work, and other behind the final loan-related checklists.

Appraisal is conducted by a licensed real estate appraiser who ensures that you are not paying more for the house than it is worth. Survey of the plot of land you are purchasing ensures that you are aware of underground utility lines and informs you of any setback lines where no permanent structure can be built, etc. Title policy highlights any deed restrictions that might prohibit a certain activity, ensures the title to the property does not have liens and encumbrances.

Final Walk-Through and Closing

To seal the deal, the buyer (you) conducts a final walk through with your realtor to ensure the house is still there and in good condition (i.e. it has not been burned down to the ground, ha ha ha). You are also checking to see that all of the repairs agreed to by the seller are complete with copies of the receipts. If all is well, a drive to the title company is the final step to sign your life away for the next 30 years (shorter terms like 15 or 20 year notes are available).

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Before you know it, you’ll hear the words, “Congratulations, you are now a proud homeowner!!”