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A 5 Step Guide For a Successful Home Buying Project

If you’re planning to buy a house, it may be easy to get lost in the excitement and immediately start looking at available properties on the MLS (multiple listing service). But before you begin to search for homes for sale in Richmond TX, it is advisable to take a step back and take time to assess a few things regarding your finances and approach. Doing this will allow you to make calculated and informed decisions when you’re moving to Richmond and make the most of what will potentially be your biggest and most important investment.

To help you make necessary preparations, here is a five-step guide for a successful house buying project in Richmond, Texas real estate.

Assess Your Debt

Managing your debt is critical for getting your mortgage application approved. Lenders will base your ability to pay back the loan amount on how well you handle your current debt. Try to keep your current debt as low as possible before you start applying for a house purchase loan. You can use a debt-to-income (DTI) ratio to work out your financial capacity to service debt monthly. As a rule of thumb, your monthly debt including your mortgage payment should not exceed 36% of your entire monthly income.

Check Your Credit

Your credit score determines your qualification to get a loan, as well as the terms of the loan. If you have a low credit score, that is an immediate deterrent for lenders. Some lenders accept a credit score of as low as 500 to qualify applicants for their loan programs, but these mostly require larger down payments and have higher interest rates. If you have a high credit score of over 800, you’ll be able to borrow a loan with a lower down payment requirement and with a low interest rate.

Review Your Budget

This is something that often takes new homeowners by surprise. When you buy a house, your monthly expenses increase significantly. This comes from property taxes, homeowners’ insurance, maintenance charges, and costs from other sources besides your mortgage payments. To compensate for these additional expenses, it is advisable to review the budget you’ve allotted for your new home, and calculate if you’ll be able to manage all the expenses once you've bought the new house.

Determine Your Down Payment

The amount of down payment you make determines your risk factor to your lender. In other words, the bigger the down payment you make, the less of a risk you are to your lender. For lenders, borrowers who pay more up front are less likely to default their loan. If you pay 20% of your mortgage amount as down payment, you will not be required to pay for a private mortgage insurance (PMI), which is an insurance policy used by lenders to protect themselves from the loss of defaulted loans. This will spare you from having an additional monthly expense.

Partner With Trusted Real Estate Agent

A common mistake homebuyers make is to try to keep their expenses low by doing everything on their own. This is an approach that is most often counterproductive. When it comes to exploring the real estate market, no one knows the properties more than real estate agents, and with their expertise and knowledge, you could land a deal far better than what you could find on your own.


Buying a home is a major investment, and like all big projects, you can make the most of it by doing some solid logistic ground work. Do not rush the process and do not hesitate to work with professionals who are more knowledgeable and experienced than you.

Speaking of knowledgeable professionals, no other team is more familiar and updated with the trends and developments in the Richmond Texas real estate than A-Team Realty Group. To find the best real estate deal for your budget and needs in Richmond Texas, contact us.

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