Purchasing a real estate property is not an overnight decision. It is a substantial financial choice that takes time and money. Thus, once you decide you want to invest in one, you should do thorough research.
It is not enough to browse the web for houses for sale. Your research should also include looking through the area where you want your home to be. Is it safe? Is it easy to land opportunities?
If you are a first-time buyer in Texas and want to ensure that your money will be invested in the right place, let me help you.
First-Time Buyer in Texas
Whether you have just moved from another state or are an existing resident who was previously jumping from tenant to tenant, this part will surely be helpful. This will be an overview of what you need to know before browsing through TX real estate.
How to buy a house in Texas for the first time? Here are the things you need to prepare:
Emergency Fund
Setting up an emergency fund when taking on significant investments is not new. However, it is also a step that people overlook, especially when buying a home. The thing is, it is essential for expenses can add up fast.
Do not be complacent because you are paying less on the mortgage than your previous rent. When you are the owner, you are responsible for every cost associated with the house. This includes repair and maintenance – which could be hefty.
Thus, even if you are debt-free, you still have to ensure that you have extra funding to withdraw from when fixtures or other upkeeps need to be paid for.
Credit Score
Maintaining an excellent credit score is vital for housing mortgages. This will gauge how much loan you will receive from a mortgage provider, such as a bank – the higher your credit score, the higher your chances of getting a larger amount.
A favorable credit score is also beneficial for getting preapproved loans. So, how to buy a house in Texas? Your credit score must be around 662 – 730 when looking for Texas homes for sale.
However, this is just a range – don’t lose hope if yours is lower. There are other programs offering loans to those with lower scores.
Down Payment
If you are eager to buy a house because you are looking to raise a family in your dream home, but you do not have the means to pay for the total amount, the general rule is to save at least 10 to 20% for the down payment.
If you can save a maximum of 20%, go for it. Doing so will help you skip paying for private mortgage insurance or PMI. This is the cost to hedge the potential loss the mortgage provider might face during foreclosure.
Private mortgage insurance costs an annual rate of 1% of the total loan amount, and this could be a hefty sum if compounded throughout the mortgage term. Hence, securing a down payment could save you a lot.
Closing Costs
Aside from the down payment, this is another set of fees you have to pay to land a house. You have to pay this amount to secure a deal on a real estate property. It costs around 3% to 4% of the total house price.
As a buyer, closing costs consist of the price you have to pay to finalize ownership and the fees charged by your loan or mortgage provider. Closing costs vary depending on the state.
In Texas, the average is almost 1.5%. There are also no real estate transfer taxes charged. You may visit this link, https://homesbyardor.com/how-to-buy-a-house-in-texas/, for more details on how to buy a house in Texas – particularly the closing costs.
Affordable Neighborhoods in Texas
Photo by Jimmy Dean. Source
Texas is a state that houses people of diverse backgrounds. It is ideal for people from all walks of life. So, even if you are a low or average earner, there are still neighborhoods where you can live with your family in your dream home.
Diboll
This is a city located in the Eastern region of Texas. It is known for its humid weather, suitable for people who love going out without enduring the freezing temperature. Diboll only has mild winters, so that you can enjoy a hike at the Davey Crockett National Forest.
Diboll is also the 4th when it comes to housing prices. Rentals run for as low as $500 per month. On top of that, the town also offers affordable real estate properties with an average household income.
Vernon
Vernon has about twice the population of Diboll – almost 11,000 residents. It is perfect for people who want to embody the ranch life of Texas. Moreover, Vernon also houses several antique stores for those interested in historical pieces.
House rentals are about $700 per month. Meanwhile, if you want to purchase a house of your own, it costs about $68,000 – with an average household income of nearly $46,000. So, you can spot cheap houses for sale in Texas here.
Monahans
Monahans is home to several tourist spots. If you and your family are interested in exploring the outdoors, there are plenty of white-sand beaches where you can surf and sand football fields where you can play. A famous place in this town is the Monahans Sandhills State Park.
The average household income is about $25,000 higher than Vernon’s – almost $70,000. Houses are valued at around $88,000, and unemployment is just around 7% of the entire population of 7,587.
El Paso
If you prefer city life, El Paso is one of the largest towns in Texas, with almost 700,000 residents. Despite having tons of museums and zoos, you can still explore the serene scenic views of nature with its mountains.
Yet, housing is still affordable in El Paso. The average monthly rent is almost $800, and homes are valued at approximately $130,000. Building a dream home is within arm’s reach, for it also offers numerous opportunities as it is a manufacturing region.
Summary
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Raising your family in your dream home is a costly decision. However, it does not mean giving up when you are a first-time or low-earner buyer. There are still several opportunities for you if you do your research.
So, how to buy a house in Texas with a low income? You may start by checking the affordable or cheapest neighborhoods in the state. There are plenty of safe areas, but they are still ideal for those earning the average income.
Moreover, you may also research the grants or mortgage options for housing loans in Texas. They may be able to help with the down payment or with landing your dream home.
