Home ownership is the fulfillment of the “American Dream.” Despite some uncertainty caused by the temporary effects of COVID, many experts are predicting a return to normal in the coming months, making this an excellent time to consider building or buying a new home. Because on its proximity to employment, great schools and potential for an increase in value, the planned community of Gateway Forney, on the eastern side of the Dallas/Fort Worth Metroplex, has been added to the wish lists of individuals and families in the market for a new home.
In order to decide when to buy a new home, several factors should be considered.
Mortgage Interest Rates
This factor is crucial to a decision to build or buy a new home. Why? Small fluctuations in the mortgage interest rates can result in the savings in thousands of dollars each year. There is some good news for home buyers: As of June 2020, these rates are historically low! With the 30-year fixed-rate mortgage hovering below 3.30 percent, this is an excellent time to buy a home at the most affordable rates you will ever see. This means that for qualified buyers, the average monthly mortgage payment can be several hundred dollars less than it was last year.
According to this guide, if a family’s outstanding credit card and automobile debt is eliminated or reduced, this becomes a big “box” that can be checked. When combined with other factors, this can make qualifying for a mortgage loan possible.
Your credit score plays a huge role in determining the interest rate families can get on their mortgage. In the months leading up to your new home purchase, there are some things you can do to keep your credit score as high as possible:
- Pay your bills on time
- Keep credit card balances low
- Don’t close unused credit cards
- Don’t apply for other unneeded credit accounts right before a big purchase
- Dispute any inaccuracies on your credit reports
Steady or Growing Income
Most financial advisors suggest that families should never spend more than 30 percent of their income on a mortgage payment. If a promotion or raise in salary has occurred, an individual or family does not have to put as large of a percentage of their total monthly income toward a house payment. The extra income takes away a financial vulnerability that they may have placed themselves in.
Savings for Emergencies
Consumer financial guides note that, “By having income set aside that is the equivalent of at least a year of monthly bills — is a good position to have before buying a house. Again, living lean and having this as a firm goal is the only way to attain this position for yourself.”
Money for a Down Payment
The crazy days of no down payments are long gone. Mortgage lenders note that If a buyer has at least a 10 percent down payment saved outside of your savings and emergency fund totals, they might be ready to buy or build a house. If it is possible to put more down, like 15 percent or 20 percent, then it’s even better because the PMI (private mortgage insurance) can be avoided.
Long Term Plan
“Buying a house is a large investment,” according to this source, “so you want to make sure you don’t plan on moving in the next few years. This type of investment is meant for the long-term, considering most mortgages are the traditional 30 years. While you don’t have to decide to stay firmly planted for that long, it is important to stay put for at least five years in order to not lose on this investment.”
What a Family Wants in a Home
When the financial requirements are met, there are several other factors that should be considered:
- Is the location optimal for the commute to work?
- How are the schools rated?
- Is it better to build a new home, buy a new home or purchase an existing home?
- What are the amenities of the community or neighborhood?
- What are the healthcare options in the area?
- What is the potential for a return-on-investments when it is time to sell?
Gateway Forney Could be in Your Future
With one of the most convenient and dynamic locations of the DFW Metroplex, thoughtful layout and design, well-respected builders and exemplary public schools, Gateway Forney might be the perfect place to realize your American Dream of home ownership.
Contact us today and we will show you a future that will make you smile.