When is the Right Time to Buy Your First Home?
Whether you’re dreaming of room to grow or a place to make your own, the prospect of owning your own home is exciting. The best time to purchase a home is different for everyone. Yet, there are important steps first-time homebuyers can take to help increase success.
6 to 12 months out.
Know important milestones. When does your current lease expire? What is the first day of school? Is family coming in for the holidays? These factors can affect when you purchase and move into a new home. You’ll want to allow ample time to find your dream home in the right neighborhood and navigate the purchase process.
Step up your savings game. Saving for a down payment is one of the first steps in buying a new home. If you aren’t doing it already, track your monthly expenses. Try an online tool, such as Wally, Mint or your bank’s app. Regularly contribute to an account designated for your down payment to reach your savings goal.
A good rule of thumb is to aim to save 20 percent of the cost of the home you want to purchase. Depending on your mortgage loan, a 20 percent down payment may allow you to avoid paying private mortgage insurance (PMI). PMI is a fee charged to you to protect the lender’s investment in case you default on your loan. Not all loans require a 20 percent down payment; ask your mortgage lender what type of loan is best for you.
6 months out.
Research your mortgage options. Your financial situation is essential in determining what you can afford and what kind of mortgage you will qualify for. To get in your best financial shape, reduce your debt and increase your savings. A mortgage lender, such as TRI Pointe Connect, the affiliated mortgage company for Trendmaker Homes, can assist you in determining what is right for your budget.
Check your credit score. When deciding if you should get a loan, lenders look at the state of your credit. Generally, lower credit scores mean higher interest rates, and in turn, higher mortgage payments. With a low credit score, you could end up paying thousands (or hundreds of thousands) more over the life of the loan. Typically, potential homeowners who have credit scores of 720 or above will receive the most advantageous interest rates.
If your score is not where you want it, there are a few steps you can take to improve it:
1. Pay down your debt
2. Check your credit report and have inaccuracies removed
3. Make payments on time every month
4. Avoid applying for new loans or credit cards
Make your wish list. Decide what is important to you in a new home and neighborhood. Open floor plans? Outdoor patio? Good schools? Resort-style amenities? An easy commute?
4 months out.
Start a pre-qualification file. Collect documents you may need, such as 1099s, copies of your last three paychecks and your last three tax returns, and a list of your liabilities and assets.
Create an emergency fund. Burst water pipe to burst appendix, there is always a risk that a serious, unexpected expense may occur. Be prepared with an emergency fund. Ideally, you should set aside a minimum of three months of living expenses.
Begin your search. Visit model homes and different neighborhoods to find the best fit for you. Trendmaker Homes has gorgeous, move-in ready homes available throughout Houston and Austin. You can enjoy open floor plans and high-end finishes, along with resort-style amenities in many neighborhoods.
3 months out.
Get pre-approved. Work with your lender to have your credit checked and your income and assets verified before you find your dream home.
Turn to a professional. Qualified experts, such as Trendmaker’s New Home Specialists, can help guide the homebuying process for first-time homebuyers.
Narrow your search. Decide on a neighborhood and home style. If you find a home for sale that you love, make an offer.
1 month out.
Select the winner. Decide on your new home and begin the purchase steps. One of the benefits of buying a Trendmaker home is the streamlined buying process and help each step of the way.
Love where you live. With gorgeous homes in the Austin and Houston areas, Trendmaker Homes has one just right for you. Chill on the patio with beverages and barbecue, gather for a holiday feast or enjoy amazing amenities right in your own neighborhood.