(Dallas, TX) April 24, 2013 - Are You Ready To Become A Home Owner?

 
A very good reason to bolster one's finances before entering the Dallas Texas home-buying fray, is that a strong quantity of homes for sale, in any market, is instrumental in determining who has the leverage to set the price. That means buyers with the financial flexibility to raise their offer stand a better chance of actually purchasing a specific home.

Use our Bill Kukla Realty calculators to help you figure your mortgage payments and payment schedule, find out what price of a home you can afford based on your income.

Here are five tips to get financially organized to purchase a home:

1. Evaluate your financial picture and how much house you can afford
Before you get too involved in looking at listings, take some time to evaluate your finances thoroughly. Use our household budget calculator to determine what you have available to spend.

2. If you're a first-time buyer and haven't been saving money or have been living paycheck-to-paycheck while dealing with other debt, you'll likely have to make major lifestyle changes to get in the best position to buy a home. A discussion with a professional is probably in order.

This will give you an idea of how much of your monthly income you can reasonably afford to spend on a home.

The house payment should not be more than 28 percent to 30 percent of the monthly income.

3. Set your goals, but be aware Now that you've figured out roughly how much money you should devote to housing, consider other costs, such as repairs, utilities, and if you are buying a condominium, homeowner association fees?

We recommend renters calculate the extra monthly costs that come with homeownership and start setting aside that amount. This accomplishes two goals: Saving money for a down payment and getting them accustomed to the financial constraints of homeownership.

4. What should the down payment amount to? While some loan programs allow homebuyers to make a down payment of as little as 3.5 percent of the purchase price, experts say you'll need to save enough for at least a 20 percent down payment in order to get the lowest interest rate and avoid having to pay private mortgage insurance, or PMI.

If you're a military veteran, you can qualify for a loan program that enables veterans to obtain a mortgage without a down payment.

Even if you end up getting a loan that requires private mortgage insurance, once you've made enough payments to build your stake in the home to 20 percent, you can apply to have PMI waived. And until then, PMI is tax-deductible.

In addition to a down payment, you'll also have to set money aside for closing costs, which can run into the hundreds or sometimes thousands of dollars.

5. Again, use our real estate calculators to help you figure your mortgage payments and payment schedule, find out what price of a home you can afford based on your income. Let's begin knowing what Dallas, TX homes you can afford!