4 Steps to Take if You Want to Buy a Home Soon

Is home ownership in your future? If your goal is to buy a home within the next six months or sooner, it would be best to start arranging your finances now! So, instead of jumping straight to the house hunt, let’s review some essential items to prepare you for buying a home.

Check Your Credit Report

Preparing your credit score and financial history are critical components of mortgage qualification. With AnnualCreditReport.com, consumers can receive three free credit scores per year, one from each of the main credit reporting bureaus. Once you have received your report, review it for any inaccuracies or errors, and if necessary, take steps to improve it.

Take these steps right away to get your credit in better shape:

  1. Always pay bills on time.
  2. Avoid applying for new credit cards.
  3. Dispute any inaccuracies on your credit report.
  4. Pay off any debts possible.

Build Your Savings

You may have already started saving if you have set the goal of buying a home. In competitive housing markets, some buyers may benefit from a larger down payment. But don't assume you have to put down 20%. Certain programs, such as those available to veterans and first-time home buyers, allow some people to make smaller down payments.

Home buyers usually have a downpayment at the forefront of their minds, but don’t forget it is wise to have funds set aside for unexpected emergencies and repairs that may arise with the new home as well. 

Get Pre-Approved Before Searching

Never begin home shopping without a pre-approval in hand! A pre-approval helps you define your housing goals and shows potential sellers that you are serious about purchasing their home.

Once you've decided on a lender, you should request a preapproval letter, which details how much you might be able to borrow. Unlike a prequalification letter, a preapproval letter informs the seller that lenders have reviewed your finances and confirmed that you qualify for a loan, giving you an advantage over buyers who can't prove that they will get financing. The lender may verify your income, check your bank statements, and pull your credit in order to obtain this letter.

Interview Real Estate Agents

Hiring a real estate agent who looks out for your best interests will make the home-buying process much easier. Investing the time to interview a few agents can make a significant difference in your transaction, so select someone who will support your goals, work within your budget, and provide expert guidance.

Inquire about potential real estate agents' backgrounds, knowledge of your desired area or neighborhood, and fees.

Bottom Line

Don’t put off preparing for your first (or next) home purchase, it is in your best interest to start taking these steps now! When you get to the point of seeking guidance from a Realtor, you won’t be disappointed in our team at 316 Realty Group. Our Realtors have a vast knowledge of the greater Houston, Dallas/Fort Worth, Austin, & Waco markets and care for our clients like family. 

Are you ready to have a conversation about your next home purchase? Reach out today!


Tips for Preparing Your Credit for a Mortgage

If you're considering purchasing a home or refinancing an existing mortgage, you most likely know the importance of paying your bills in a timely manner in order to preserve good credit. Even if you intend to be responsible with credit, certain situations can derail you and harm your score.

We’re going to go over some tips to help you keep your credit in great shape so you can avoid any credit issues. Let’s get started!

Review Your Credit Scores and Reports

It is critical to review all three of your credit reports from Equifax, TransUnion, and Experian before applying for a mortgage. AnnualCreditReport.com offers a free copy of each report once every 12 months.

If you find any errors on your credit reports, you should notify the credit reporting agencies immediately. An investigation into a credit dispute can take between 30 and 45 days. Furthermore, if the first investigation results in a negative outcome, you may have to try again or try a different approach entirely to resolve the issue.

Pay Down Credit Card Debts

 Are you aware that even if you make your monthly payments on time, having a large outstanding credit card balance can impact your credit? It's actually high credit utilization on your credit cards that can hurt your scores, but large balances in relation to your credit card limits cause that high utilization.

You can lower your credit utilization ratio by paying down your credit card balances. Once the new card balances are updated on your credit reports, this may have a positive impact on your credit scores.

Make On-Time Payments

This one comes as a no-brainer! On-time payments are critical to establishing and maintaining good credit. If your credit reports show any recent late payments, it's usually a good idea to wait some time (six to twelve months) before submitting a mortgage application.

When late payments first occur, they have the greatest negative impact on your credit score. Then, as time goes on, they become less damaging. In terms of scoring, the older a late payment becomes, the better.

Hold Off on New Credit Applications

When a lender checks your credit as part of an application, a hard inquiry is recorded on your credit report. That hard inquiry could have a 12-month impact on your credit score.

This isn't to say that every time a lender pulls your credit, it will harm your scores, but it is possible. As a result, if you know you're going to buy a house soon, you should put a hold on any non-essential new credit applications.

The Takeaway

Taking the time to improve your credit score could save you tens of thousands of dollars in interest over the course of a 30-year mortgage. Whether you are about to purchase your first home or your third, it’s easy to get lost in the excitement and the urge to move quickly. You must keep in mind the role your credit score plays in the cost of your mortgage and your ability to even qualify!

Before you apply, take your time and prepare your credit to the best of your ability. Your efforts may pay off and save you a significant amount of money in the long run.

 


HOA Communities: Pros and Cons

Are you considering purchasing a home in a community with a homeowner's association (HOA)? Make sure you understand how these organizations operate before making an offer.

An HOA is governed by a Board of Directors (homeowners elected by other residents), and it's their responsibility to set and enforce rules and maintain the grounds. These organizations are not only found in single-family home communities but in condominium and townhouse communities as well. You must also pay certain fees to live in these communities  So before you start looking for a new home, you should consider whether you want to live in a neighborhood with an HOA, which comes with both pros and cons.

Pros of HOA Living

1. HOAs Resolve Disputes Between Neighbors

When problems arise, (loose pets, loud and obnoxious parties, piles of trash by the road, to name a few), a homeowner's association can help.

If you notice another resident breaking a rule or regulation, the association can act as a mediator. Rather than discussing the problem with your neighbor and causing tension in your relationship, you can contact your homeowner's association, which will contact the neighbor on your behalf.

2. HOAs Have More Social Activities

Streets with an HOA often have a stronger sense of community than your average neighborhood. This is due to the fact that having an HOA encourages a sense of community. Not only do HOA meetings will help neighbors to get to know one another, but they also give greater opportunities for social events.

It wouldn't be out of the ordinary to see block parties and social gatherings on your street from time to time. It's also easier to connect with neighbors when you start sharing amenities like a pool, tennis courts, or a golf course. If you like meeting people and socializing, an HOA could be right up your alley.

3. HOAs Maintain Property Values

In HOA communities, homes, and common areas are consistently cared for and well-maintained because residents are held accountable to deed restrictions. Property values are heavily influenced by this maintained curb appeal. 

A well-kept home in a well-kept neighborhood is what attracts many home buyers to live in an HOA. You could say this is the biggest perk for most!

Cons of HOA Living

1. HOA Fees Can be Expensive

Unfortunately, many HOA communities can be expensive to join. High HOA fees, in general, entail more landscaping, general maintenance, and amenities. However, if you don't care about having a swimming pool or a gym, these high fees would be a waste of your money.

If a home has high HOA fees, make sure to get a list of everything that's included in the price so you know exactly what you're getting and if it even benefits you personally. In addition, carefully examine your monthly budget to ensure that you can manage to pay the monthly dues.

2. HOAs Have Rules and Regulations

If the monthly fees are reasonable, paying HOA fees may not seem as bothersome. You should be aware that the HOA has rules regarding the exterior of your home, even if you're fine with the fee. 

Color, type, and size restrictions may apply to your front door, shutters, and windows. Associations can even restrict your outside decor and the number of vehicles you can park. A fine may be imposed if you violate the rules and regulations of the community.

3. HOAs Can Lack Privacy 

It goes without saying that you will not have a lot of privacy if you live in an HOA community with homes practically touching each other, such as a townhome, apartment, or even some single-family homes.

Those who like a rural or country lifestyle and don't want to be involved with neighbors should consider homes with no HOA. The benefit of living close to your neighbors is meeting more people if you are more social and thrive in a community.

Is a Community Right for You?

Bottomline, HOAs aren't for everyone. If you want complete privacy or the ability to change the appearance of your home, you probably won't be content living in an HOA community. However, if you want a low-maintenance lifestyle, HOA living may be ideal for you. Whatever you decide, carefully consider the benefits and drawbacks of HOA living. 

As a final point, don't forget the importance of working with an experienced and knowledgeable Realtor. We look forward to assisting you on your home-buying journey!


3 Common Mistakes to Avoid When Buying a New Construction

The idea of a new construction home sounds appealing to many people. New construction homes provide endless customization options and the opportunity to truly make your own personal touches In a brand new home, you won't have to worry about old, stained carpets or old appliances; instead, you can select what best suits your family's individual tastes. 

While choosing your favorite brick, paint, and countertops may be exciting and seem pretty simple, the buying process for new construction homes can be quite challenging without any prior experience and knowledge. 

The good news is that following these tips for buying new-construction homes can save you money, and time. Here are three common mistakes to avoid when purchasing a new home.

Failure to Research Your Builder

Buying a new home will most likely be one of your family's largest investments in a lifetime, so it is essential that you prioritize quality, especially when it comes to the developer or builder in charge of creating your new home.

Even if you have completely fallen in love with a neighborhood and the style of its homes, you still must research your builder thoroughly. Look for reviews online, and keep an eye out for any patterns and feedback you may see, such as an excess amount of premature repairs/issues, poor workmanship, cut corners, and delayed construction. 

You as the buyer can decrease your risks by doing appropriate research ahead of time, to save you both time and heartache!

Failure to Budget for Extra Costs

New builds can start as blank slates. Sure, some people may not consider it necessary to have privacy fences or gutters, but it’s only a matter of time before they realize they really dislike having a straight shot of their neighbors every time they sit on their porch, and they’ll probably be calling the gutter company after that first hard rain that creates trenches in the new lawn all around their home!

If you build in a community that has a Homeowner’s Association (HOA), you’ll want to read over the rules carefully. Make sure you set aside the expenses ahead of time to take care of any loose ends to be in compliance with the HOA. After all, nobody is excited about getting a letter from their Homeowner’s Association during the first week in their new home! 

Failure to Work with a Realtor

There are most definitely some differences between buying a pre-owned home and a new construction home. As a result, unless you are an extremely experienced buyer, it is critical to have proper representation and take precautionary measures throughout the purchasing process of a new build.

It is of utmost importance and in your best interest to hire a Realtor before visiting potential locations and the property sales office. You always want your Realtor present to represent you properly!  A Realtor will work to ensure that you are set up for success from the start, handling communications, disclosing the benefits and drawbacks of the property, and may even be able to help you negotiate lower costs.

Bottom Line

Purchasing a new construction home has significant advantages. However, there are numerous pitfalls, so buyers should exercise caution at all times and have the assistance of a real estate professional throughout the process. Before signing off on your new home, carefully consider all of the advantages and disadvantages of new construction.


First-Time Home Buyers & Rising Inflation

If you're like many first-time home buyers in the United States, you're probably worried about what inflation means for you. How do you know how this will affect the purchase of a new home? It doesn’t really help morale when you hear the latest statistics about inflation. In April 2022, inflation accelerated by 8.3% more than in April 2021, keeping inflation near 40-year highs! 

In today’s blog, we will go over what inflation means for you, so you can better understand this concept, and move on with finding your first home. Let’s get started!

Inflation, in Plain Terms

Let’s first go over what inflation is. Inflation is the process in which prices increase over time. In other words, your money right now is worth less than when you first possessed it.

As consumers, we don’t like to witness inflation, but if you look at the big picture, some inflation can be a good thing. A healthy economy should always have some inflation, as rising prices encourage people to buy goods, houses, services, and more, instead of waiting until later. This results in more work that is available for producers, which means they can continue to hire. 

Inflation can be good if occurring slowly, and not too quickly. For example, think about your favorite coffee shop, that latte you pay $3.50 for suddenly jumps to $6. That would be a shock, to say the least!

Housing Impact

Inflation impacts housing prices simply because the price of materials used for the construction of homes goes up. 

Home appreciation is impacted because homes go through price increases, due to many variables. Such variables include the home’s condition, number of bedrooms/bathrooms, location, and condition. 

Home Buying Impact

As a first-time home buyer, you’re curious about what impact inflation could have on you buying your first home. Due to the nature of inflation, the prices of homes will continue to climb for a while. Mortgage interest rates will rise, which means taking out a loan will become more expensive as a higher interest rate leads to higher monthly payments. 

What to Do in This Market?

You're wondering what you should be doing as a first-time home buyer in this housing market. First, it’s s a smart move to pay off any existing debts, in order to have a better DTI (debt-to-income ratio.) This is an important factor a lender will look over when deciding to approve you for a loan. Make sure to avoid opening any new credit card accounts or making any big new purchases, this could harm your credit greatly. 

Be Honest With Yourself

As a first-time home buyer, and especially in the current market, your budget won’t be able to fit everything you want in your home. Make a list of what your home absolutely must have and cannot do without. 

Talk to your real estate agent about these aspects and don’t forget about fees and any funds you need to be aware of and may need to bring to closing.

Closing Up

This market may be intimidating for first-time buyers, and it may feel like you could be locked out of the market. High rates are combined with high home prices, and affordability is being pushed farther away right before us. If you have the means financially, you may want to start the search now and make a move. Contact our team at 316 Realty Group so we can guide you through the process of buying your first home, we promise you don’t want to do this alone!