Last Updated on June 9, 2017 by Taylor Welshe
Texas’ charm goes beyond its fame as being home to cowboys; at its core are plenty of things to do, sights to see, and attractions to enjoy. Starting from its scenic landscapes comprising of rugged hills, lush forests, desert land, charming prairies, green grasslands, and miles of coastland to its diverse and rich culture, its residents really do have a lot to thank for. And the different beautiful cities it has, including Austin, Corpus Christi, and Forth Worth, offer home buyers a great place to live and establish a family in. (Source: Livability.com)
Add to all these the state’s low cost of living, and there’s no wonder why it garners its fair share of real property investors. (Source: Sperling’s Best Places)
Affordability of homes in the state
A lot of the residents of The Lone Star State take pride in the fact that they have their very own homes. Home ownership rating here is at 61.9%. (Source: U. S. Bureau of Census)
One factor that greatly contributes to this is the affordability of homes. The median home value in the state is $163,100, whereas the countrywide median is $195,300. (Source: Zillow)
House prices and values still depend on the specific type of dwelling though. The lowest-cost kind of residential property here are single-family homes, which have an average value of $138,403.00. Next are PUD homes, the values of which average to $149,612.99, then townhomes at $152,753.52. The most expensive are condominiums at $193,621.80.
Buying a house through a mortgage
Majority of home buyers can only afford to make this big purchase through a financing service. The most common way to buy a house is through a mortgage, which are basically loans designed for this particular purpose. It comes in two primary forms, namely: fixed-rate and adjustable-rate mortgages.
Prior to housing loan application, consumers should first establish the following:
- Price of a house they can afford
- How much down payment they can and should make
- Length of time they will occupy the house
- Current and future income
- FICO score
It’s important to take these into careful consideration, as these will help them determine which of the two types of mortgages best suit their finances, needs, and preferences.
Comparing rates can make a huge difference
Since home buying and ownership comes with long-term expenses, borrowers should implement strategies that will help them minimize their housing loan costs.
One of the most effective ways to avoid unnecessary expenses that can lead to repayment difficulties is to compare mortgage offers, particularly the interest rates. The smallest difference can already mean savings of thousands of dollars. By choosing the lowest-rate loan, consumers can already reduce their chances of foreclosure or bankruptcy.
Down payment 101
Another good way to trim mortgage costs is to make a down payment of at least 20% on the property. This means paying off 1/5th of the house’s selling price. There are several good reasons to do this.
Firstly, it minimizes the mortgage amount one needs to borrow. The smaller the loan, the smaller the amount of money that a lender can apply interest on. In other words, borrowers would spend less towards just paying interest.
Also, it eliminates the need to purchase mortgage insurance, the cost of which can easily and quickly add up over the life of a loan.
Although home buying in the state is more affordable than in other parts of the nation, many consumers may still have some difficulties securing a mortgage or keeping up with their loan repayment.
In this case, they should get in touch with the Texas Department of Housing and Community Affairs (TDHCA), which offers mortgage assistance for first-time buyers, including the program called “My First Texas Home.” Those who qualify for this can secure a 30-year fixed-rate mortgage with a lower interest rate. Borrowers can also use up to 5% of the loan amount for making a down payment or paying for closing costs.
Texas Department of Housing and Community Affairs
Department of Housing and Urban Development