By

Sue Martin
Coldwell Banker Myers-Gallagher
361-758-7534

If you are currently renting property, it’s likely you have put some thought into whether you should consider buying a home. Making that leap from renter to homeowner can seem overwhelming. But with a little knowledge and some help from your local Realtor, you can make the transition smooth and seamless.
Why buy when I can rent? You’ve heard it from family and friends—why don’t you just buy something? Well, one of the first steps to purchasing property is weighing the benefits of homeownership with renting and determining which one is right for you. The more you know about why you should buy, the fewer reservations you will have about taking the step. From a financial standpoint, buying a home is like investing in your future. We all know that the real estate market can fluctuate. But over the years, the real estate market has consistently appreciated, providing homeowners the opportunity to build wealth. Homeownership is also a good tax shelter. You can deduct the cost of your mortgage interest from your federal income taxes, and interest is typically the largest portion of your mortgage payment in the first few years. Another tax benefit is the one you get from paying property taxes. We know property taxes in Texas are high, but when you own your home, you’re also able to deduct the property taxes that you pay each year.
Do I need to put 20 percent down? The short answer is no. The long answer is that it depends on several factors, including the cost of the house, the type of mortgage, and your financial position. Typically, you will need to come up with money to cover three things: earnest money, downpayment, and closing costs. Earnest money is the money you give to the seller when you submit your offer. It tells the seller that you are serious about purchasing the home. The downpayment is a percentage of the loan amount that you will be required to pay when you go to settlement. Both of those expenses are credited to your loan. Depending on negotiations, the buyer or seller could be responsible for the closing costs, although typically the buyer covers most of these costs. Fees associated with closing costs include title insurance and title search, discount and origination points, application fee, credit report fee, etc. Your lender will provide you with a Good Faith Estimate prior to closing that outlines the costs.
If you’re considering buying a home but are not sure where you will come up with the necessary funds, it may surprise you to learn that there are housing opportunities in the form of grants and low-interest loans specifically for you—the first-time homebuyer. (Remember our article back in February that talked about downpayment assistance programs? It’s on our website for you to review if you would like.) Also, ask your local Realtor about programs in our area.
Should I use a local Realtor? It’s been estimated that there are 146 small and large tasks associated with buying a home. Are you comfortable with managing these tasks without the assistance of a professional? Never mind the amount of time required to find the right house. Realtors are experts at negotiating, and this is an important asset when it comes to the property’s asking price, financing options, and the terms of the deal. From finding the perfect home in the right neighborhood to securing a mortgage loan that fits your budget, your Realtor is committed to making the home buying process simple and painless. Realtors adhere to a strict code of ethics, which goes above and beyond the call of the law. Knowing that your Realtor is looking out for your interests can help put your mind at ease. Finding a Realtor during the initial stages helps ensure your interests are protected along the way.
For more information on buying your first home, I invite you to talk to your local Realtor at Coldwell Banker Myers-Gallagher. Call 361-758-7534, email info@texascoastproperty.com