Build Your Savings Regardless of where you fall on the 28% rule, purchasing a home requires cash on-hand for things like earnest money, down payments, and furnishings. As a result, it’s important to build up your savings even before you’re ready to buy a home. There are plenty of ways to save your hard-earned dollars, from cutting back on nice-to-haves to taking on extra work and more. Regardless, the key to saving money is to ensure that your expenses don’t exceed your income. Closing Costs Closing costs typically cover the cost of preparing your loan and the fees associated with your home’s title and appraisal. These vary by location and loan type, so make sure you work closely with your lender, sales professional, and REALTOR® (if applicable) to ensure you know how much you owe and when. How to Lock in an Interest Rate You will need to lock in an interest rate prior to closing on your home. There is no crystal ball to determine the ideal timeframe, but you will want to be in regular contact with your Loan O cer and your Home Sales representative to confirm that your closing takes place before your rate lock expires. Extending a rate lock could subject you to additional fees or a new interest rate, which would restart the underwriting process.
How Credit Scores Impacts Your Home Purchase Any drop or dip in your payment schedule could negatively impact your credit score, which could hurt your chances of landing a preferred rate. That’s why it’s important to keep an eye on your credit score leading up to and during the homebuying process.
A few essential credit tracking resources include: • Experian • Equifax • Credit Karma • TransUnion
Impact of Tax Rates Property taxes vary widely across the state and within municipalities. Some have municipal utility districts (MUDs), some have public utility districts (PUDs), and some school districts are taxed higher. While taxes are not due until the end of the year, many customers opt to include taxes in their escrow payment rather than plan for a lump sum payment at the end of the year/near the holidays. One easy way to view a home’s potential tax rate is to use the Texas state sales tax rate locator , which allows you to see property taxes by address.
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