If you’ve been thinking of moving to Austin, TX, now could be the best time to do it. You’re not alone in thinking so; Greater Austin has grown by 35 percent in the last ten years, and two million people call it home today.
As such, the real estate market is booming. Redfin’s August 2020 data shows that homes in the area sell in about ten days for about $450,000, up 15.4 percent from 2019. Here are some ways you could jump in successfully and navigate this exciting moment in Austin real estate.
Be sure of the type of home you want
There are more than 2,300 homes for sale in the Austin area as of September 2020. Although this is a considerable number of properties, there are 20 percent fewer homes for sale than in June 2019. As such, Austin’s market has become more robust.
In 2019, the median home price was $407,400. However, Redfin reports that as of September 2020, it has increased to $450,000. If you’re thinking of moving to Austin, you must define your search parameters very well since you’ll have a range of home types and a lot of competition.
Have your mortgage pre-approved
You need to understand the home mortgage process and get your home pre-approved so you can get an offer that suits your budget. Research your credit score and settle any discrepancies. You want to have it in the best shape possible, so look into paying off or consolidating debts.
Also, make sure you know exactly how your mortgage rates affect your monthly payments. In Austin, the average rate on a 30-year fixed-rate plan is 4.16 percent. This figure is smaller than the 4.82 percent interest rate from December 2019, which could mean hundreds of dollars in savings for you.
Prepare your deposit ahead of time
Typically, real estate professionals recommend a 20 percent down payment on a new property. Don’t let this prevent you from your homeownership goals, though. Some programs allow you to buy a home for less than that; some plans even allow you to get a home with as little as three percent down payment.
Remember, though, that if you pay a down payment smaller than 20 percent of the total sale price, you would need to make a monthly PMI or Private Mortgage Insurance payment. This fee is on top of your regular mortgage dues. Ask a mortgage broker or a real estate professional about how the PMI could affect your finances in the long run.
Know the “hidden” costs of buying a new home
Apart from the actual purchasing of a house, all your preparations for it could also rack up quite a bill. Local moving companies could charge up to $1,400 for a job, and you could spend $500 per month on storage. Before planning to buy a home, consider all the attached expenses, and decide if a less expensive property is more suitable for your budget.
Get reliable contractors for the escrow period
Once negotiations close, you will have to do escrow, where the bulk of financing, paperwork, and inspections happen. Do not skimp on the home inspections; get a skilled professional to look at the property and provide recommendations.
Buying a new home takes a lot of work. To find the best home, especially in a competitive market like Austin, you need to do your research. Partnering with professionals like mortgage brokers will also help you secure the best prices and land the best terms.
Be one step closer to finding your dream home when you consult with Lakeway Lending. We are Austin mortgage brokers dedicated to helping our clients find the best property for their goals and needs. Get a custom rate quote today, or contact us for more information!