Dallas, Texas is the 18th most expensive city in the country to buy a home. There are many housing options in Dallas but the fact remains, it is not a cheap place to live.
In Dallas, the average home price is nearly $250,000 requiring an annual salary of at least $60,000 for a 30-year loan with a monthly payment of almost $1,400.
So, are you ready to buy a home in Dallas, Texas?
Consider all your debt when deciding when it is right to buy a home. Lenders will, so you may as
well beat them to it. Your income-to-debt ratio will be evaluated to see if you fall below the 43 percent threshold lenders are looking for when they determine your ability to repay the loan.
Along with this you should get a copy of your credit report, check it for accuracy, and have any errors repaired. This will help to improve your credit score, another thing lenders take into consideration.
Do you need to pay off your student loans first? Not necessarily. Most experts agree any student loans with an interest rate above 6 percent should be paid off.
Down Payment, Closing Costs and Other Expenses
Depending on the loan you could be required to make a down payment of up to 20 percent of the purchase price of the home. If you qualify for an FHA loan you may only need a 5 percent down payment but most conventional loans require 20 percent.
Closing costs are another expense you need to consider. These include such expense as attorney fees, loan orientation fees, taxes, inspection, surveys, any credit report charges, title searches, title insurance, and discount points. Your real estate agent should be able to provide a good estimate or you.
Other expenses you need to be ready for include possible deposits and connection fees for your water, electric, gas, and cable. You could also need to pay for garbage collection and Internet hook up.
Also remember if you are moving from an apartment you will now assume many of the responsibilities your landlord took care of, such as repairs and maintenance.
Five Year Benchmark
If your career path isn’t set or you aren’t happy with your job or city in which you live it may be time to investigate moving. Use five years as a benchmark.
Ask yourself where your career will take you in five years. If you are unsure buying a home may not be such a good idea at this time. It generally takes about five years before most people hit the breakeven point on a house and start to see more equity build up.
Trust Your Gut
If you are feeling pretty good about your situation as described above and you are not letting any outside influences force your decision then trust that feeling. You know yourself better than anyone else, except maybe your spouse.
If you aren’t being pressured by peers, family members or in-laws to purchase then your gut feeling may just be the right choice for you. Trust that feeling.