Texas homebuyers are in the midst of an atypical housing market with rising prices, high demand, low inventory and selective lending requirements. To avoid being squeezed out of the market, potential first-time buyers should employ careful forethought and planning before applying for a loan. If you are new to the real estate market, be sure you are ready to buy your dream home by following these tips.

Determine what you can afford. Evaluate your monthly budget to know how much mortgage you can comfortably afford. In addition to the mortgage payment, be sure to factor property taxes, mortgage insurance premiums, homeowners insurance and homeowners association dues into the monthly payment.

Know how much you can put down. In most cases, you will be required to pay a percentage of the purchase price to buy a home. If you don’t have a significant amount available for a downpayment, there are other options such as low-downpayment FHA mortgages and other loan programs. Veterans and active military even have access to no-downpayment loans. However, loans made with little or no down will have additional mortgage insurance premiums.

Find a local real estate agent. Choose an agent who specializes in the area where you would like to own a home. A local agent will be able to advise you about important issues such as fair market value, taxes, neighborhoods and schools. Look at the agent’s current and recently sold listings to see how well they mirror properties you would be interested in buying. Ask for references from past clients.

Be credit smart. Buying a home is a major financial move, which means your credit must be in the best shape possible before you talk to a lender. Review your credit report, report any mistakes and do not make large purchases that will affect your debt-to-income ratio and negatively impact your ability to qualify for the loan amount you want.

Don’t wait. It’s impossible to time the market perfectly. Waiting may cause you to miss out on lower rates, lower home prices or even the home that is perfect for you. When you are ready, contact City Bank about home mortgage loans that are best for you.