According to a report from Apartment List, more than 47 percent of renters in the Dallas area spent over 30 percent of their income on rent! What’s more is that rent is increasing in Dallas. It no longer makes sense to rent in Dallas and throw money away on something that you don’t own.
In the years between 2005 and 2015, the median monthly rent climbed from $897 to $992. Currently, the renter’s median income is $3,426 per month. What if the rent went toward a home instead? New homes in Dallas and nearby cities have steadily gained value. Your home will be worth more in 5 years than what you pay for it today.
Benefits of buying a home
Financial advisors repeatedly encourage clients to save now and make the most of your company’s 401(k). Yes, it can be scary to buy a home when you can’t be sure your job is secure. Not to mention, you may be dealing with student debt. Still, U.S. News’ “Why Buying a Home Is a Smart Investment for Millennials” says that investing in a home is one of the better financial moves.
“Buying a home is one of the smartest financial decisions you can make as early as your 20s,” says Riccardo Ravasini, managing director of Rava Realty, “because it is inflation-protected and a physical asset that doesn’t disappear like stocks can do.”
Imagine renting for a year at the median $992 per month. That’s almost $12k for a year. That a good chunk of change to throw away instead of investing it. With the rent increasing in Dallas, you can’t afford to move every time the rent climbs.
Many companies are moving to the Dallas area. You have a diversity of job and company options. It increases your chances of staying in the area for a long time to come.
Don’t forget that mortgage interest comes with a tax break. It’s deductible from your income tax. In short, you’ll owe less when tax season hits.
How to get the best mortgage rate
Furthermore, mortgage interest rates remain low, making home ownership more attractive. Interest rates go up and down, but they often fall below 4 percent.
Here are four ways to lock in on a lower mortgage rate:
- Ensure you have a strong credit rating. The higher your score, the lower your interest rate. If your score needs to be higher, focus on increasing it as soon as possible.
- Shop around for the best deal. Most borrowers don’t bother comparing prices. Start with your bank since they may offer discounts to customers.
- Remember the lowest rate isn’t always the best one. If only it were as simple as studying the interest rate. You’ll need to consider whether you do a 15-year or 30-year loan. The interest rate is likely to be lower on a 15-year, but monthly payments will be higher.
- Make a large down payment. The more you pay up front, the lower the interest rate. It may be worth holding off on buying a home so you can save enough for a down payment on a home.
Here is what you need to know as a first-time homebuyer to help you in the process. Considering the rent is increasing in the Dallas metroplex, this could be the right time to invest in a home.
Or if you need a little time to boost your credit rating and save up for a down payment, you might ask friends and family for financial adviser recommendations. A financial adviser may be able to help you achieve your goals faster. This allows you to take advantage of the hot DFW housing market and lower interest rates.
Some home builders like Sandlin Homes go the extra mile in providing tips to help people looking for new homes in Dallas. We may know about a couple of good resources that can help. Contact us with your questions about buying a new home.