Shop For Your First Home Sweet Home
Your idea of the sweet life in your own home may be very different from that of someone else. So many things can vary—architectural style, the materials used, the floorplan, the size and number of rooms—the list is virtually endless. But there are a few things that apply to everybody, across the board: rules that each and every person who is considering buying a home should know and follow in order to be a wise homebuyer and a happy homeowner.
1. The THREE most important things in real estate are location, location, and location.
That’s because location equals value. It’s up to homebuyers, of course, to determine what “value” means to them—and specifically what they value most. For instance, some homebuyers want to keep their commute short and live close to where they work. Others with school-age children might prefer areas with high-quality schools and a family-friendly atmosphere. While those who are nearing retirement might put a priority on the proximity of medical facilities and communities or neighborhoods with services, facilities, and amenities that cater to seniors.
In addition, safety and security are frequently major issues for many. It’s relatively easy to find out about local and area crime statistics, as well as the proximity of police and fire protection to neighborhoods you are considering).
Location also strongly impacts your financial investment in a home. Therefore, a smart thing to do is to begin your search for a home in areas that are prosperous and/or growing.
Good signs of this are property taxes and desirable school districts—they both contribute to property values. If you want to learn more about a school or a school district’s ranking, go to the Texas Education Agency’s website: www.tea.state.tx.us.
Finally, location will make a difference in whether you personally feel comfortable and happy in a neighborhood or not. In order to get a feel for what it might be like to live in an area you are considering, drive around at different times of the day and night, during both the week and weekends.
See what traffic is like at peak traffic hours. Observe if homes and landscapes are nicely maintained. Think about things like the convenience of supermarkets and shopping. And don’t be afraid to get out, walk around, and talk to a few residents. Ask them what they like and dislike about the area. By the time you’ve done your homework, you’ll have key insights and an overview that will truly be useful in making a very important homebuying decision.
2. Determine how much of a financial investment you can afford.
Here’s a list of things you need to consider in order to come up with a realistic number. There are several mortgage calculators available on the internet at no charge. They can provide you with estimated payments on the price range of homes you think you might be able to afford. Just keep in mind that these calculators, while helpful, are only very generalized estimates and do not include other factors that should be considered—like the cost of owning the home. They may not also include things like taxes and mortgage insurance. Include other monthly financial responsibilities you have—such as car payments, credit card bills, daycare, utility bills, and any outstanding debt you may have. A lender will take all this into consideration before approving you for a loan.
Ask your lender for a mortgage pre-approval letter which will show that you are a serious homebuyer as you shop for a home (See TIP# 4 for more information on a pre-approval letter). Don’t forget that most loan programs will require a down payment. Find out from your lender how much you will need.
If you would like to purchase a lot and have a home built, find out about the “One-Time Construction Loan” program available from Thrive Mortgage. This unique loan program will save you money on closing costs and give you the convenience of only having to qualify for one loan that includes both construction and permanent financing on your home.
If you are buying a newly constructed home, don’t underestimate what your annual tax bill might be. Remember, most newly built homes are usually not taxed at their full value the first year. That’s because taxes are assessed on only the “unimproved” property prior to construction. Don’t be shocked when you get the following year’s tax bill, which then taxes the land and the “improvements” (the new home).
3. You must be ready to commit to the expense and time necessary to maintain and own a home—inside and out.
In addition to the monthly mortgage and taxes, you have a commitment to your neighborhood to maintain your lawn, as well as your landscaping. You will also have to protect your home’s exterior (think roofing, painting, and so forth) against the occasionally harsh South Texas weather and climate. Then, there is the inside of the home. Beyond monthly bills, there will sometimes be repair and replacement costs associated with plumbing, heating, air conditioning, and major appliances.
4. Don’t settle for a home built to minimum code.
Building codes represent the bare minimum required for a home to pass building inspections. In the state of Texas, the building code should follow the 2015 International Energy Conservation Code (IECC)—by law. Unfortunately, many municipalities do not enforce the 2015 IECC, and as a result, a newly built home may not be in compliance with Texas law.
What does this mean to you? It means you may be buying a home that is not as energy efficient as it should be. The good news is that here in the Rio Grande Valley, there is a program called BUILT TO SAVE® that certifies homes to higher standards, and if you find a new home that has been certified as BUILT TO SAVE®, you will have the best proof that you are buying a high-performance home that will provide more energy savings, as well as offer better indoor air quality and comfort, to name a few of the benefits.
More importantly, you can rest assured the home was built to standards that are higher than minimum code requirements and above what is required by Texas law. Go to www.BuiltToSave.org for more information or to see a list of builders enrolled in the BUILT TO SAVE® program.
5. Enjoy your success of home ownership.
Owning a home is often referred to as the “American Dream,” and it is one that the majority of Americans strive for. It is achievable, especially in today’s market with historically low interest rates and competition among lenders. Follow your dream, take the right steps, and you’ll soon join the ranks of proud homeowners.
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