Welcome to Tarrytown, an idyllic neighborhood situated along the Colorado River to the northwest of Austin, Texas. Famous for its natural charm and scenic views, Tarrytown is the ideal neighborhood for people looking for a tight-knit community, access to outdoor recreation, and close proximity to Austin. It’s serenely beautiful and upscale, with everything you need for a comfortable life.
If Tarrytown has charmed your heart, and you’ll soon be in the market for Tarrytown Austin real estate, Dustin Weiss has compiled this home buying guide to help you get started.
Understand the basic real estate terms
There are four fundamental terms every buyer should learn before stepping into the world of real estate.
Pre-approval
The first step to take is to get a pre-approval letter from a certified mortgage lender. It is an official document that states how much of a loan you’re eligible for, based on what kind of home you can reasonably afford. Mortgage lenders calculate the amount by assessing your financial history and credit score, and the pre-approval process only takes a few minutes. Getting one beforehand is incredibly important, not just because it strengthens your credibility as a buyer, but also because many sellers won’t sell to buyers without a valid pre-approval letter. Pre-approval letters are valid for 90 days.
Credit score
Your credit score demonstrates your level of borrowing risk and financial responsibility as a whole. The higher your score, the more likely sellers and lenders will want to work with you. On the other hand, while a low credit score won’t completely bar you from buying a home, it’s not ideal and will limit your options.
The pre-approval process is the perfect time to check your score and remedy any errors or inconsistencies that may arise. Keep in mind that even the most marginal increase — or decrease — greatly impacts your cumulative score.
Down payment
A down payment is an upfront and out-of-pocket expense that must be paid during a transaction. The amount varies from buyer to buyer, but it’s generally recommended you put down 20% of the home’s listed value. The more you pay upfront, the less your mortgage payments will be. We suggest that first-time buyers should opt for a smaller amount, given the multitude of other expenses that need to be accounted for. Some buyers pay as little as 3% in down payments, but it ultimately depends on your budget.
Closing costs
At the end of every successful transaction, the buyer and seller pay a set of processing and additional fees called closing costs. The number and percentage of fees vary on a case-by-case basis, but the general standard is about 3-5% of the purchase price. Closing costs are affected by your mortgage lender’s rates, the home’s location, and the current state of the housing market. Like down payments, closing costs are upfront and out-of-pocket.
Qualifying for a loan
Your loan eligibility is based on your debt-to-income ratio (DTI) and overall credit score. Your DTI is the percentage of your net monthly income that is spent toward your cumulative sum of monthly expenses and debt. Most lenders prefer a DTI of 36% or lower, but there are a few who may accept 49%, but nothing higher than that. To be on the safe side, aim for a low DTI.
A credit score of 740 or higher guarantees the best mortgage rates, but you’ll be just fine with a minimum score of 700. To improve your score, understand the five factors that affect your credit.
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On-time payments comprise 35% of your score. Avoid late payments. This is perhaps the most important factor.
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Utilization is the percentage of total available credit across your accounts and comprises 30% of your score. Utilization at 30% or lower is best.
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Credit history comprises 15% of your score. The longer you’ve had credit, the better.
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Credit mix comprises 10% of your score. It’s recommended to have a mix of different credit accounts.
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Credit inquiries and newly opened accounts bring your score down. Inquiries comprise 10% of your score; avoid too many new inquiries.
When you apply for a loan, you need valid proof of your income, documents that show additional financial assets and equity, and deeds to other properties, just to name a few. Your real estate agent will help you secure the documentation you need.
Making an offer
Once you find the home that piques your interest, acquire the needed documentation, and verify everything with your real estate agent, you can finally submit an offer.
Purchase amount
Before you submit your bid, assess the house for yourself. Ask yourself the following questions:
- Does this home suit my household and fulfill our needs?
- Are there any outstanding repairs that I’ll end up paying for? Replacements or upgrades for systems and other infrastructure?
- What about the location? Does it satisfy my criteria?
- How long has the home been on the market?
- How do other properties in the area compare?
Above all else, stay within your budget, but never lowball the seller.
Contingencies
Contingencies are requirements that must be satisfied before a contract becomes legally binding. If these requirements aren’t met, either the buyer or seller can end the deal without any repercussions. Contingencies should be specific, and both parties should always agree to the terms.
Negotiation
Photo courtesy of Shutterstock
In the event of a counteroffer, you have the right to negotiate. Your real estate agent is your number one ally when it comes to negotiating, so rely on them. They’re experts with years of experience, and they’ll always be in your favor. If the seller rejects your offer, however, it’s best to move on. You may attempt to negotiate, but the seller likely has their reasons for not wanting to work with you.
Closing
Once an offer is agreed upon and the contract is signed, congratulations! The home is yours. The final step is to prepare for closing day by arranging a move-in day, transferring the funds, and receiving legal ownership of the property.
Regardless of whether you’re a first-time buyer or a more experienced one, it’s always helpful to recruit a real estate agent like Dustin Weiss to guide you through the process. His expertise and familiarity with Tarrytown, Austin real estate is guaranteed to expedite buying a home while landing the best possible deal in the process. Reach out to realtor Dustin Weiss with The Weiss Group when you’re ready to get started.
*Header photo courtesy of The Weiss Group
