January 21, 2025
There are lots of questions about buying a home for the first time. Here are four of the most commonly asked questions about home buying, as they apply to Houstonians in 2024:
Information about interest rates is not something most schools teach. Therefore, many adults looking to buy a house have thoughts such as “How do interest rates actually work?”, “How are interest rates calculated?”, and “What is a good interest rate?”.
First, what is interest and what is an interest rate? Interest is the price you pay to borrow money. When borrowing money, the original amount borrowed must be paid back, plus a certain percentage of the total loan amount. This certain percentage is the interest. The exact percentage applied to the borrowed money is the interest rate.
An interest rate is determined by several factors, and each lender uses different factors. Some considerations when deciding an interest rate are credit scores, income, length of the loan (longer will have a higher rate), as well as economic trends which no one person has control over. Understanding interest rates is important because higher interest rates mean paying more money over time. For example, a $200,000 loan with an interest rate of 4% simple interest means the total amount paid back to the lender is$208,000. This is the original amount of $200,000 plus $8,000 (which is 4% of $200,000).
What is considered a good interest rate can change almost daily, so be sure to do your research and keep tabs on which direction rates are heading. In mid-2024, a good home loan rate was 6.17% for a 15-year fixed loan, while 6.89% was a good rate for a 30-year mortgage, according to Freddie Mac’s weekly survey. Referencing the example above, a $200,000 loan would have to be paid back as $212,340 over 15 years and $213,780 over 30 years.
One of the benefits of working with Habitat for Humanity is that they are able to negotiate with lenders to secure a mortgage that fits your budget, often below current fixed mortgage interest rates, and making certain you can afford your mortgage.
In the world of home buying, being a first-timer can have many benefits, such as lower interest rates. That is why it is important to know if you can be considered a first time home buyer. There are more variations of this title than one might think. Did you know you can be a first-time home buyer more than once?
As a few examples of accessible assistance, there is a Texas first home buyer program, while certain occupational groups can receive special bonuses for being first-time home buyers. For those identifying as the following, research what additional benefits are available to you: veterans, service members, educators, firefighters, EMTs, law enforcement, doctors, and nurses. Spending time reviewing all possible avenues of support can save major money in the end.
Houston Habitat for Humanity offers equal opportunities to all. Applicants receive consideration for home ownership without regard to race, color, religion, national origin, sex, disability, and familial status. This means a single person can get a Habitat for Humanity home as likely as a married couple, a single parent, or a multiple person household.
Many U.S. households spend a large portion of their income on housing, meaning they have less money for other essentials like food, clothing, transportation, and healthcare. For those without the benefit of a second income from a partner, many single people carry the full weight of expenses alone, including emergencies. For a 1-person household, the income requirements are $33,150 minimum and $53,000 maximum. The single home buyer must also demonstrate a need for shelter, a good credit score, ability to pay, have a willingness to partner, and be a legal resident 18 years of age or older.
When looking to establish a permanent home in Houston, many consider location to be a top priority. Houston is a very large city with many diverse neighborhoods and communities and location can often be the biggest factor in determining the price of a house.
So what are the top neighborhoods for settling down in Houston?
Robins Landing is one of Houston’s newest perfect neighborhoods featuring 460 single-family homes on 127-acre property full of amenities in North Houston. It is also Houston’s first affordable master-planned community, featuring stormwater infrastructure, a childcare center, healthcare, banking, a library, and onsite green spaces and trails. Single-family houses in Robin’s Landing feature 3 or 4 bedrooms, 2 bathrooms and range in size from 1,100 to 1,400 square feet. Robins Landing is ideal for those looking for a walkable and family-friendly neighborhood.
The historic Settegast neighborhood is another affordable place for those looking to own. Houston Habitat has been working to revitalize this neighborhood by building new homes and repairing numerous homes damaged by Hurricane Harvey. Long-time and new residents are highly committed to maintaining and improving their neighborhood. This includes multiple beautification projects and a community garden! If you are looking for a strong community vibe, check out Settegast.
Want more? Below is an alphabetical listing of additional affordable areas in Houston to consider.
The home-buying process can feel overwhelming, but you don’t have to navigate it alone. Houston Habitat for Humanity is here to support you on your journey to homeownership. Join countless Houstonians who have built and purchased homes of their own. Begin by taking our Homeowner Eligibility Quiz—it’s the simplest way to see if you qualify to become a Houston Habitat homeowner. The screener, available in both English and Spanish, takes just 15-20 minutes to complete. Be sure to have your financial, debt, and living information ready. There’s no limit on how many times you can apply, so take the first step today for a brighter tomorrow!
