Reader’s Question:
Our family is originally from New Hampshire which is considered as a tax free state or a state where tax burden is lighter, so to speak. That’s why when I got married and moved to Dallas, everything seemed so new to me. My husband usually travels overseas. I am now obliged to check on domestic affairs and have come across on issues about real estate taxes. What is property tax and who decides how much the property tax will be?
Samantha
Dallas, TX
Property tax is an “ad valorem” (based on the value) tax imposed on persons because of their ownership or possession of property and is measured by the market value of the said property. Let’s classify the types of property, which is divided into two categories:
- Real property- includes land, anything permanently attached to land (e.g. houses), improvements to land, structures, and certain equipment affixed ; immovable manmade objects.
- Personal property -the primary characteristic of personal property is its mobility. Examples of personal property include furnishings, machinery and equipment, fixtures, supplies, tools, cars, boats, livestock, personal effects and household goods.
Perhaps you are also wondering how tax is determined, right? Well, the tax rate for residential property is determined by taking the residential share of the property tax levy (the amount of the total tax dollars to be paid by residential owners) and dividing that amount by the total assessed value of all residential properties. Tax assessors determine the market value of each and every parcel of property in the city and decide how much the property tax will you’re your tax district determines the amount of money needed and makes computations on the tax rate necessary to raise that money. Property tax due on an individual property will be based on the combination of tax rates and the appraised property value.
Reader’s Question:
My brother bought a house 3 months ago in Texas but it seems like he was not able to get a good deal, contrary to what he thought he had when the house was offered. Right now he is placed in an unconventional situation and his expenses are way beyond what he expected. I am planning to buy a new house too but I don’t want to make the common mistakes that my brother did and be sorry later on. What do I need to avoid then?
Valerie
Dallas, TX
In every transaction, it is always important to” look before you leap.” This may be a cliché to some but I strongly believe that it should still be a rule of thumb. The biggest investment you’ll ever make is purchasing a new home and because there are the numerous factors to consider it is essential to prepare as best you can. The best preparation therefore is to avoid the common mistakes in buying a house, so …
- Avoid looking for a house without being pre-approved – this is very important because pre-approval gives you an exact price range for your purchase and will also add a great deal of strength to your offer.
- Avoid stretching your house-purchasing ability- is a smart homebuyer. Forcing yourself right up to or beyond your financial limits is unhealthy, so don’t overbuy.
- Avoid shortcutting the inspection process- don’t purchase a home without professional inspections, unless you’re buying a new home with warranties, it is highly advisable to have a thorough home inspection.
- Avoid signing documents without reading and making verbal agreements- whenever possible, review all documents in advance and know the specifics of your transaction as well.
- Avoid choosing the wrong realtor / real estate agents – as a potential buyer , you might be better off having an agent representing you exclusively, don’t use a dual agent. Be cautious when selecting a real estate agent. Don’t hesitate to ask them key questions. Make your purchasing experience the best it can be, so it is crucial that you select the best agent who can help you out with a very good deal.
Again, it’s still best to do your homework be prepared and to be more objective. Try to scout and shop to find the perfect house for you; just remember that if something is questionable, it isn’t perfect. So avoid the common drawbacks.
Reader’s Question:
When I mentioned to my friends and co-workers that I wanted to apply for a home loan, I was literally swarmed by phone calls from lenders and it seems like there are just as many lenders as there are loans. It’s very challenging for me to decide. Can you tell what do I need to consider when comparing loans in Dallas?
Arthur
Dallas, TX
Yes, you are absolutely right when you said that there are just as many lenders as there are loans. When you are given hundreds of choices it may seem overwhelming at first. When you compare loans, it can be very tricky because there are so many types available. But it’s good to know that you have different financing options to choose from.
There are important factors to consider when comparing loans such as: interest rates, required down payment, loan-related fees, point (a one-time charge by the lender for originating a loan. A point is 1 percent of the amount of the mortgage), pre-payment penalties (A fee that may be charged to a borrower who pays off a loan before it is due) and conversion options (like converting an adjustable to a fixed-rate mortgage).
You may also investigate the requirements for qualifying for each loan. These requirements usually include: your credit score limits, your cash and credit reserve requirements and loan-to-value ratios (the relationship between the principal balance of the mortgage and the appraised value/ sales price of the property).
To simplify, you need to check of the following when comparing loans: lower interest rates, lower loan fees, minimal features, less flexibility and no additional repayments.
Arthur, you also need to know about the lock-in period. This is the time period during which the lender has guaranteed an interest rate to a borrower .If you’re comparing lenders, be sure you not to compare apples to oranges, meaning the type of lender versus the type of loans. The process however is process quicker and easier if you have a crystal clear picture of your finances. Plan ahead and decide on what kind of monthly payment fits your budget. By then, you can easily eliminate loans and lenders that are not suitable for financial needs in Dallas.
Reader’s Question:
My family and I have always wanted a home in Dallas. So I am thinking about applying for a home loan. Can you give me an idea on the general types of loans that are available?
Amber
Dallas, TX
Homebuyers are lucky that there are more financing options available nowadays than there has ever been before. There are financing packages designed to meet the needs of every prospect homebuyer either from traditional mortgages to adjustable-rate and hybrid loans. Although the different choices seem very overwhelming at first, the overall goal is really quite simple: you want to find a loan that fits both your current financial situation and of course, your future plans.
But first, we need to understand the general types of loans you may want to apply:
- Fixed-rate- Traditionally, fixed-rate mortgages have been the most popular choice among homeowners, because the fixed monthly payment is easy to plan and budget for, and can help protect against inflation because the interest rate remains stable over the life of the loan.
- Adjustable-rate – Adjustable-rate term Loan has interests that adjust periodically as rates shift. This may let you take advantage of lower near-term interest rates because interest rate and monthly payment can change over the life of the loan.
- Hybrid loans- This is a combination of both fixed-rate and adjustable-rate features. Usually, a hybrid loan may start with a fixed-rate for a period of time, and then later can be converted to an adjustable-rate mortgage. But be sure to check with your lender and find out how much the rate may increase after the conversion.
- Conventional loans- This loan is simply a loan offered by a traditional private lender. It can either be fixed-rate, adjustable, hybrid or other types. Some resort to this because it often requires less paperwork and typically do not have does not have a maximum allowable amount. Private individuals may have a hard time qualifying for this than government-backed loans.
Amber, it would also be helpful to know the length of time you plan to own a property in Dallas because this may have a strong influence on the type of loan you choose.
Reader’s Question:
A friend of mine mentioned about refinancing my home in Dallas. As a long time homeowner I can’t remember the details of my current loan, including the exact interest rate. I actually don’t have a broader idea about it. When do you think should I refinance?
Amanda
Dallas, TX
First, we need to know what refinancing means. To “redo” or to “re “finance is to basically redoing your original financing. It also means extending the existing loans or replacing existing funds with alternative borrowings, which may be at different interest rates. It can either be for longer or shorter terms.
There are various reasons one would refinance. One is possibly to switch from an adjustable to a fixed mortgage, to lower you interest rate, to obtain money from the equity in your property, or to consolidate debt through cash out, etc. However, you need to do your homework first before deciding to refinance. An important factor is the difference between current interest rates and the rate of your original loan. You also need to assess the amount of time it will take to recover the costs of refinancing.
These are the common reasons when to refinance:
- To lower monthly mortgage payments
- To convert an adjustable rate mortgage to a fixed-rate mortgage
- To raise funds for family expenses
- To pay off high-interest loans
- For home improvements
Just bear in mind that you should refinance your home in Dallas Texas if interest rates fall more than 2 points below your existing mortgage rate. This is because refinancing usually involves mostly of the same closing costs as the original loan. If it’s less than 2 percent, the savings on your monthly mortgage payment is rather insignificant. When a drop in interest rates is sufficient to repay the costs of a refinance in a reasonable period of time, then you should refinance. It’s a good thing that there interactive calculators in the Internet to help you come up with a decision.
Reader’s Question:
My wife was recently promoted and will be based in New York. We are going through a lot of big decisions right now and that includes selling our house in Dallas Texas. But with our busy schedule and our hands full on the move, we really don’t have the time right now to focus at the selling process. I want to learn more about hot or cold market and comp? What are these selling terms?
Calvin
Dallas, Texas
I do agree that the largest business transaction most of us will ever make is selling our own house. The process can be time consuming and very complex. It would also create a lot of anxieties and questions. You may wonder how much your house is really worth – did you set the price too high or too low? It is your main responsibility though to arrive at an accurate estimate of value. So you need to ensure a detailed evaluation and analysis on every part of your home. This is important to get the true value of your home under current market conditions in Texas.
A “hot” market is termed where there are more buyers than sellers, so the buyers are competing with each other and driving up prices. A “cold” market on the other hand is one with more sellers than buyers, so the buyers can be choosy and bid low. So, the hotter the market, the more aggressively you can price your house. It’s best to do it in a “seller’s market” if you can choose when to sell – this is when the number of available homes is low in relation to the number of buyers.
A “comp” means comparable sales. It refers to recent sales of similar features of properties in nearby areas and is used to help determine the market value of a property. That is why the best source of pricing information comes from houses directly comparable to your own.
It would be better if you can personally put a figure on how much your house is worth. But if you feel like you really need help, you can seek out assistance from a reliable team of realtors or commission for a real estate agent.
Reader’s Question:
After my divorce, I was granted the full custody to my three daughters. We sold the old house and will be relocating. I am having difficult time though in determining my housing needs because I can’t help thinking about our old house. But in a practical sense, what should I look for in purchasing a new house?
Brenda
Dallas, TX
Yes, it is indeed difficult to look for a new home especially if you have been attached to the old one. However, soon enough, you and your daughters will find a new home to start anew. What you need first is to take your time and think carefully about each house you see. You may ask your real estate agent to point out the pros and cons of each home from a professional standpoint. Your new home should be suitable for your way of living, with spaces and features that appeal to the whole family. Before you begin looking at homes in Dallas, it’s best to make a list of your priorities – things like location and size.
You can establish a set of practical requirements and a “dream house wish list.” Practical requirements are the things that a house must have for you to consider it, while a ” dream house wish list” covers the things that you’d like to have but aren’t essential.
Here are some of things you need to consider:
- Enough room / space for both the present and the future
- Number of bedrooms and bathrooms
- House structure
- Plumbing/mechanical systems
- The yard
- Floor plan
- Pay attention to the home’s surroundings
- Location of the house
- Size of the house
- Accessibility to public transportation / work and school
Most of all imagine the house in all weather conditions. If you think
That you would be happy in this place all year round, then this is what you should look for in a house.
Reader’s Question:
I am 29 years old, I am still single, and I live alone and have been renting for the past 4 years. Lately, the thought of buying a house crossed my mind. I believe I already have enough savings however; I still have some doubts if I am ready to get a house. How do I know if I’m ready to purchase a house?
Allison
Dallas, TX
For most young professionals, buying their first home can be a scary proposition. It doesn’t only represent the biggest purchase that you could make but is also a decision that you literally have to live with every day. This is why experts advise taking the time to make the most informed decision possible – it can reduce expenses, hassles and regrets.
As a first-time homebuyer, it is important to know what to evaluate in home buying process. To know if you are ready to purchase a house, you need to assess yourself based from the following guidelines:
- Steady source of income /regular employment/reliable income
- Good payment history
- Enough savings for down payment
- Has the ability to pay a mortgage every month, plus additional costs
- Motivated to buy
The only advantage of renting is being free from maintenance responsibilities. You actually lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases.
Getting your own a house on the other hand has many benefits. With mortgage payment, you are building equity which is an investment. It also qualifies you for tax breaks that would assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial but are all worth it.
So, if you think that you have the abovementioned guidelines and agree to the benefits of having your own home… Then you are now ready to purchase one.
Reader’s Question:
As newlyweds, my husband and I would really want to have a great start. We found a modern Victorian house but I’m worried that we might spend more than we have just to buy the house. This is going to be a major decision for us. What do we need to do to avoid making a wrong decision?
Heather and James
Dallas, TX
Hi,
Looking for a new home is indeed a major decision. It is not only an emotional experience but is also time consuming with a whole lot of issues. Some buyers, especially newlyweds like you are often caught up in the excitement of purchasing a new house that sometimes you tend to overlook on details. Yes, it would really be great if you can purchase your dream house but just make sure that buying a new house won’t turn into an expensive process. You already expressed your anxiety that you might spend more than what you have, so avoid falling into these general errors:
- Too expensive
- Buying the wrong house
- Rushing the deal
It is always beneficial to reconsider your finances before buying a home. Try to weigh the cost and review the rates and fees. As newlyweds, you have a new life ahead. So, you have to identify your needs and bring an objective view to home shopping .This leads you in a better phase. Don’t buy a home that is too large or too small. You also need to consider the drive to work, the distance to school, or the many repair jobs waiting for completion. Use your needs list as a guideline or checklist for every home you view. Before you sign, ensure that all documents reflect your understanding and conditions of the transaction. Therefore, you have to plan ahead to avoid making a wrong decision. If you have a systematic plan beforehand, you’ll be sure to avoid these costly errors.
Reader question:
I am thinking about purchasing a house of my own. I have already seen several houses in our area and but it seems like I have not found any that is suitable for me. I am in no rush but I really guess it’s time for me to move out from my parent’s house. How long do you think should it take to find the house that I want?
Byron
Dallas, TX
However, the question is not going to be how long… But how soon do you think it should take to find the house that you want. Since you have already seen different houses but may not seem to find one that is suitable for you, I believe it’s time to re-evaluate your priority and what’s keeping you from moving out. It would either be that you have not really found one to your liking or you are still attached to your ancestral home. Another reason is maybe because you have only seen the available houses in your area which may rather seem too familiar for you. I would suggest seeking out assistance from real estate agents who can offer you other houses to choose from. You can also try to browse through the Internet to check other options.
You can also try to re-assess if you want to live in the same neighborhood or if you want to live in a different location. If you don’t have any issues with finances, then, just like what you said, since you are not in a rush then you have all the time to look for your dream house.
Byron, some buyers will look for years, but buyers who do that aren’t motivated. You need to be motivated enough to shop and really look for the house that you want. A motivated buyer will find a home within two weeks…some buyers may even find a home within two days.
