Buying Your Hill Country Home
For many people, buying a home is considered a rite of passage. First-time buyers dream of finding the perfect piece of Hill Country real estate to call their own. But all too often, these lofty dreams have the potential to overshadow the financial considerations and practical implications of homeownership. As you consider buying your Hill Country retreat, make sure that you have explored not only how to cover the initial payment, but also the costs of regular upkeep. Consider the regular maintenance, whether your desired property is farm and ranch, a country home, or a lake home for sale in Texas.
Once you have your heart set on a home in the Hill Country, we recommend measuring the financial cost of your new home against the amount of satisfaction and enjoyment you expect to get out of it. Will be able to visit often? Will you enjoy it more than it will financially hinder you? If the answer is “yes”, it’s time to start looking at the next steps: buying your Hill Country home!
Down Payment
When buying any type of property, the first (and most intimidating) financial consideration is usually the down payment. Remember that, with a main residence, a buyer can put as little down as 3%. Use this percentage as a general rule of thumb to calculate how much you can afford for a down payment. Knowing this will also help you determine the affordable price range of the home.
Financing the Loan
How will you pay for the home? While some home buyers are able to pay cash, financing through a lender is an alternative option. However, before you go in with a lender, you should be aware that you will be expected to stay within the debt-to-income limits set by Fannie Mae and Freddie Mac. This means that your total debt payments can't exceed 36% of your gross income. To calculate DTI, add your total amount of debt payments per month (excluding utilities) to your estimated home payment, then divide that number by your monthly income before taxes. The resulting number is your DTI.
Credit Score
When financing your new Hill Country home, you’ll also have to consider that home financing requires you to maintain a reasonable credit score. In general, the higher your credit score, the better your interest rate.
Other Financial Considerations
With so many rivers and lakes in the Hill Country, we recommend researching flood insurance requirements for lake houses for sale in Texas. This may be an extra cost in addition to the mandatory homeowners insurance.
Extra Expenses
Taxes, association fees, garbage collection, and lawn care costs will most likely apply to your Hill Country home. Additionally, keep in mind that time budgeting will also be necessary when caring for your home, from performing maintenance to taking care of unforeseen issues. While the incredible payoff is the enjoyment of homeownership in the Hill Country, we recommend making sure you are being realistic about the time, work, and money involved.
Buying a piece of Hill Country real estate can be an exciting decision, but only if you are certain about how it will impact your life and finances. Before you take the plunge, look at your overall financial picture. How will you finance a home purchase? Can you really afford it? Take the time to examine your finances and your options to reduce the chances of unpleasant surprises down the road.
satisfaction:Signed by the mortgagee, this document shows that the debt owned on a mortgage has been paid in full and releases the mortgagee from further payments.
insurance:Protection against specified hazards by a company that a party pays a premium to.
