With the high level of economic uncertainty currently, first-time home buyers Houston may be wondering if they should be purchasing a home now. The answer depends upon several factors. Read on to help yourself decide if buying a house for the first time is a good idea.
Opportunities in the Housing Market for Those That Are Buying a House for the First Time in Houston
One factor to consider is how the current housing market looks when buying a house for the first time. For example, mortgage lenders in Houston are offering low-interest rates. This is good news for first-time buyers! With lower interest rates, you’ll have lower monthly payments and less interest charged over the life of the loan.
Challenges in the Housing Market for First Time Home Buyers in Houston
While low-interest rates offer opportunities for first-time homebuyers in Houston, there are also challenges. First, buyers must decide if the potential for interest savings outweighs the potential disadvantages of buying a house for the first time.
Supply and demand is the basic driving force behind home prices. There is a lot of demand for homes, but there aren’t many homes for sale. The high level of competition means that those buying a house for the first time in Houston will have fewer homes to choose from, homes will sell faster, and prices will tend to be higher.
While many areas are easing COVID-19 related restrictions, the need for continued social distancing may still affect the home buying process. For example, you may have to rely on video tours and Zoom calls to shop for houses and meet with your realtor or mortgage lenders in Houston instead of meeting in person when buying a house for the first time.
Interest rates may be lower, but many mortgage lenders in Houston have made it more difficult to qualify for financing. This may be a particular challenge for first-time home buyers in Houston who do not have an extensive credit history. Additionally, borrowers with credit scores below 650 may find it difficult to obtain financing in the current market.
On the upside, there are still programs through the state, local, and federal government agencies that can help first-time buyers obtain financing. If you have difficulty qualifying for a mortgage, it may be worth pursuing a government-backed loan. These loans usually have less strict requirements because the government guarantees them.
Individual Factors That Should Be Considered When Buying a House for the First Time
The housing market isn’t the only thing you should consider when deciding whether to buy a home. It would be best to examine whether this is a good time to buy a home based on your circumstances.
Are You Ready To Stay in One Place?
To avoid putting yourself in a financial hole, you should consider how long you plan to stay in the home you are thinking about buying. If you don’t think you will want to stay long enough for the value of your home and equity to exceed the cost of buying and then selling the house, this probably isn’t a good time for buying a house for the first time. Additionally, buyers who sell after less than two years of homeownership may have to pay capital gains taxes on the sale amount that exceeds the purchase price.
Are You Financially Secure?
A loan from mortgage lenders Houston is usually a 20 to 30-year commitment. There are multiple financial factors you should consider before making this commitment.
While the economy seems to be on the rebound, economic conditions could still be volatile. So if you think there’s a good chance you could lose your job, this may not be a good time for buying a house for the first time.
You will need money for a down payment and closing costs. While first-time homebuyers in Houston may be able to get assistance with these expenses, a lower down payment will increase the amount you need to borrow, making your loan more expensive.
Mortgage lenders Houston offers the best rates to borrowers with credit scores of 740 and above. You may still qualify for a government-backed loan with a low credit score, but waiting until your credit improves could save you money on interest rates.
Mortgage lenders in Houston don’t only look at your credit score when deciding whether to approve your loan. They also consider your debt-to-income ratio. You need to pay a certain percentage of your gross income to cover all of your monthly debt payments. If your ratio is above 36%, you may need to pay down your debts to qualify for a mortgage.
First-time home buyers in Houston that are in a good financial position and want to take advantage of low-interest rates should consider buying now. Contact the team at Rock Mortgage to find out how we can help you purchase your first home. Call us at (832) 230-3067 or contact us online.
Is This a Good Time for Buying a House for the First Time? | Rock Mortgage — Houston, Texas