What to know when buying a home in Texas

Grant Trevithick Carrollton Real Estate Investor here with another pro tip. Today I want to talk about what the process is to actually buy a home. Whether you're in Dallas, Fort Worth, Irving, Addison, or any other part of Texas this advice is for you. If you live outside of Texas 90% of this will apply to you, however, I always encourage you to reach out to a Real Estate agent in your area for proper guidance.

Buying a home is one of the largest financial decisions a person will make. Most banks offer home loans to their customers, but some may require a customer to have sufficient income to cover monthly payments on the home loan. A bank may also require that the buyer have good credit, which limits the number of buyers that qualify for a house loan. In this situation, a buyer's bank may offer financial assistance to his or her business in exchange for using its financing. In these instances, a buyer may be able to obtain a home loan without having sufficient income or good credit.
The buyer initially pays his home loan in full with his own funds before the bank transfers the funds to his real estate agent. The real estate agent then pays the real estate company and closes the sale. The seller plops down additional funds for closing costs and takes possession of her new home. After this point, the buyer starts paying his mortgage payment to stay current on his home loan. However, paying their monthly mortgage payment can feel like drinking from a fire hose when compared to what the buyer paid for his home. In this case, someone buying a house may find himself in a position where he pays too much every month towards his mortgage.
Since monthly payments towards a mortgage are costly, many people resort to debt financing when paying their home loan payments. This usually involves paying minimum payments towards existing loans or incurring extra costs on their credit cards so they can afford their monthly mortgage payment. This can cause ongoing problems if they choose not to pay off their other debts but continue credit card payments towards their mortgage or pay minimums on old debts while paying less than the minimums on their new mortgage bill. This strategy can work well if the buyer keeps up with his new payment plan and does not fall behind on other obligations- but falling behind on one's debt increases the risk of incurring additional fees.
Failing to keep up with one's home loan payment can incur additional fees from your lender as well as interest from your original balance. Typically, lenders charge monthly insurance and maintenance fees that add up when compared to what you're actually paying each month toward your home loan. Additionally, if you default on your mortgage, your lender will contact the owner of your property and attempt to collect past-due payments from you personally. If you fail to pay off your mortgage and still live in your home, you could end up losing both your property and residence at once- which is called foreclosure. While this extreme measure seems drastic, many homeowners find themselves in similar situations where they must reduce their living expenses so they can afford their monthly payments.
Financing a home purchase can be expensive since you must pay several months' worth of closing costs upfront and start making monthly payments towards your loan soon after buying your home. Many buyers turn to debt financing when paying their monthly home loan payment or fall behind on other debts and pay less than minimums on established loans to afford their monthly payments. Unfortunately, many buyers find themselves in difficult financial situations due to poor planning which leads to expensive mortgage payments. Anyone planning on buying a house should keep these considerations in mind when making an important financial decision!