Buy your first home without the overwhelm

Financial Plan

What You Have

• Combined gross income: $180,000/year ($15,000/month)
• Savings available: $60,000
• Current rent: ~$2,200/month (assumed)

Recommended Budget

| Component | Conservative | Stretch |

|-----------|-------------|--------|

| Home price | $375,000 | $425,000 |

| Down payment (10%) | $37,500 | $42,500 |

| Closing costs (~3%) | $11,250 | $12,750 |

| Emergency fund kept | $11,250 | $4,750 |

| Monthly payment* | ~$2,800 | ~$3,200 |

*Includes principal, interest (7%), taxes (~2.2% in Texas), insurance, PMI

The 28/36 Rule Check

• 28% of gross income for housing: $4,200/month max ✓
• Your target: $2,800-3,200/month (19-21%) ✓
• Leaves room for other debt, savings, and life

Location Analysis

Priority: Location & Commute

Based on your stated priority, here's how Austin-area neighborhoods stack up:

| Area | Median Price | Commute (Downtown) | Vibe |

|------|-------------|-------------------|------|

| Mueller | $550k+ | 15 min | Walkable, urban, pricey |

| Windsor Park | $425-500k | 15 min | Up-and-coming, diverse |

| South Lamar | $500k+ | 10 min | Trendy, established |

| Cedar Park | $375-450k | 30 min | Suburban, family-oriented |

| Round Rock | $350-425k | 35 min | Space for money, good schools |

| Kyle/Buda | $300-375k | 40 min | Most house for budget |

Recommendation: Windsor Park or Cedar Park—both hit your budget with different tradeoffs (urban accessibility vs. space).

The Process Timeline

Month 1: Preparation

• [ ] Check credit scores (aim for 740+ for best rates)
• [ ] Get pre-approved with 2-3 lenders (doesn't hurt credit if within 45 days)
• [ ] Interview 2-3 buyer's agents (ask about their experience with first-timers)

Month 2-3: Active Search

• [ ] Set up MLS alerts for target areas
• [ ] Tour 10-15 homes to calibrate expectations
• [ ] Identify 2-3 target neighborhoods
• [ ] Start making offers (expect to lose a few)

Month 4: Under Contract

• [ ] Earnest money deposit (1-2% of price)
• [ ] Schedule inspection ($400-600)
• [ ] Review inspection, negotiate repairs
• [ ] Final loan approval, lock rate
• [ ] Appraisal ordered by lender

Month 5: Close

• [ ] Final walkthrough
• [ ] Wire closing funds (DO NOT trust emailed wire instructions—call to verify)
• [ ] Sign approximately 10,000 documents
• [ ] Get keys

Wait or Buy Now?

Case for Waiting

• Rates might drop (Fed signals possible cuts in 2024)
• More time to save = larger down payment = lower PMI
• Austin market has cooled, might cool more

Case for Buying Now

• You're paying rent anyway (~$26k/year)
• Rates drop → prices rise (more competition)
• Building equity beats timing the market over long horizons
• Life circumstances (stable jobs, ready for roots)

Recommendation: If you find a home you love at a price you can afford, buy it. Don't try to time the market. You can always refinance if rates drop significantly.

First-Timer Mistakes to Avoid

1. Falling in love at open houses — Have your criteria written down. Check it before offering.

2. Skipping inspection — Never. Ever. The $500 could save you $50,000.

3. Maxing out budget — Leave room for furniture, repairs, and life.

4. Ignoring HOA rules — Read the HOA docs. All of them.

5. Trusting verbal promises — Get everything in writing.

Questions to Ask Before Offering

• How long has it been on market? (Leverage for negotiation)
• Why is the seller moving?
• What's included (appliances, fixtures)?
• Age of roof, HVAC, water heater?
• Any known issues or past insurance claims?
• HOA fees and what they cover?