Strategies for a First-Time Home Buyer

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Erath County and Stephenville homesInvesting in a home for the first time can be one of the most beneficial financial decisions you will ever make. Purchasing a home will give you the biggest tax break you can receive and will also allow you to build equity for the future. If you are a first-time home buyer, take a look at some strategies to consider when buying a piece of real estate in the Erath County area or elsewhere.

Always make sure to pay off your debt as soon as possible. Though it is also important to save as much money as you can in order to pay for a property’s down payment, paying off that leftover debt you have hanging over your head is equally as important. Credit card debt is typically high-interest debt and will hinder you from saving as much as you want to for your home.

According to Bankrate.com, the average interest rate on credit cards now stands at 13.8%, or more than double the 5.33% national average for a 30-year fixed-rate mortgage. The amount you are spending on paying off the interest on your credit cards is taking away any funds you could be making towards a down payment. Additionally, lenders will not allow total monthly debt service, including payments for student and car loans, homeowners insurance, mortgage, and credit cards, to surpass 40% of your total income.

Make sure to carefully plan out how much you can put on a down payment for a home and how much you will be allowed to borrow in terms of loans. It is recommended that your taxes, homeowners insurance and mortgage payment do not go beyond 28% of your gross income. Also, take into account closing costs, which add up to 3% to 5% of your total home’s value.

Looking for your Stephenville or Erath County dream home? Please contact us with any questions.

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“Terry Childers was extremely helpful, reliable, friendly, and knowledgeable. We had some bad luck while house hunting but Terry was persistent and never let up. He went above and beyond to make sure we were satisfied. If we ever sell or buy again Terry is our only choice.”
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