FIRST-TIME HOME BUYERS Guide

Inner Loop

Whether you have been contemplating the move for some time, or are just starting to get informed about the process, purchasing a first home in a desirable area is one of the most important achievements in your life and a step towards financial freedom.

The vast amount of information that is available on the topic makes it difficult to know where to begin and how to distinguish which information is relevant to your unique circumstances. This First-Time Home Buyers’ Guide will help you navigate the questions that arise when it is time to make the leap from renting to home ownership.

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IS IT BETTER TO BUY OR RENT?Houston’s average rents recently hit a record high -- and they keep rising. At the same time, home prices also reached an all-time high in 2015 and have been growing on an annual basis. While these facts prompted many to purchase homes while they could still afford to, the decision to rent or buy is a personal one that is based on your individual situation. Surge Homes has retained Trulia's "Rent or Buy?" tool to help you decide whether it's more advantageous to rent or buy. The tool, along with this guide, provides a foundation for making the most informed decision possible.

You can view the tool at:

www.trulia.com/rent_vs_buy

What is your income tax rate?

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What is your mortgage rate?

Special Loan Options

Mortgage Assumptions

One Time Costs

Ongoing Costs

Economic Assumptions

Click on None

Down Payment

Buying Closing Costs

Long Term Capital Gains Tax

Selling Closing Costs

Mortgage TermMinimum down payment is 5%.

Select the maximum term of 30 years.

The rate is 15% for individuals making less than $400,000 annually.

These are the fees when you sell the home, leave at 8%.

Click on “See a Tax Rate Chart” for guidance.

The calculator uses the market interest rates that change with time.

These costs are hard to estimate at the beginning of the buyingprocess. They can vary between 2.5% and 4%. We recommend using 3% as an estimate.

Annual Property TaxIn Harris County, the average property tax rate is 2.31%.

Rent InsuranceLeave at 1.32%.

Homeowner’s InsuranceLeave at 0.46% for Houston.

PMI (Private Mortgage Insurance)You may use 0.61% for a Houston condominium.

Rent AppreciationAverage rent increase for Houston for Sept. 2014 to Sept. 2015 was 5.4%. We recommend 2.7% for the calculator.

Discount RateThe interest rate you could make on your money if you were investing it instead of buying a home. Currently, the 5-year treasurybond is at 1.66%.

Price AppreciationFrom 2011 to 2015, home prices in Houston increased by 7.5%per year. To be conservative, we suggest 3% for the future.

RenovationsLeave at 1% for a new home, but could be much higher for an existing home.

Homeowner Condo / HOA FeesSee surgehomes.com for HOA fees (approx. $0.22 per square foot per month for condos and $0.10 for townhomes and single-family).

Additional Utility Cost for HomeownersApplies only if purchased home is larger than rented home.

Click on Show Advanced Settings

The Trulia® Calculator is recommended strictly for educational purposes. Contact a mortgage professional to obtain an accurate estimate pertaining to your situation.

Rent or Buy Calculator Tips to fill out the

Another question to answer when deciding whether or not it is time to make the leap, is how much cash you must have on hand to purchase your first home. Most lenders will require a minimal down payment representing 5% of the home’s purchase price. This means that a home valued at $150,000 will require a down payment of $7,500.

In addition to the down payment, you may be asked to pay for all or some of the following fees: appraisal fee, loan origination fee, survey fee, title insurance, title search fee, property taxes, and more. These fees called “Buying Closing Costs” can amount to approximately $4,500 for a home purchased for $150,000. These fees are hard to estimate at the beginning of the home buying process. A discussion with a lender will shed more light on what they will actually be.

Interest rates have been at all-time lows and represent a wonderful opportunity for aspiring homebuyers who can lock in a rate on their mortgage payments for many years to come. The Trulia® Calculator allows you to simulate different interest rate scenarios and see how a higher percentage can quickly price you out of the market and keep you from becoming an owner. In order to get a better idea of the home price you can afford, we recommend that you set an appointment with a mortgage lender and get pre-qualified for a home loan. This important step will allow you to have a good idea of the residence you can purchase based on your current income, debts, and assets. (The pre-qualification service is free, and you are not obligated to commit to a loan.)

Owning a home inside Houston’s 610 Loop is a great option for first-time buyers who wish to enjoy a dynamic lifestyle without spending hours in traffic every day. Brand new homes located in well-established inner city neighborhoods are most often out of the price range for first-home buyers, but this is not the case with Surge Homes’ innovative residences. The table below shows monthly payments for a brand new Midtown condominium.

* Monthly mortgage payment estimate based on an annual interest rate of 4%, 30-year amortization, 0.61% rate of personal mortgage insurance and 5% down payment. Other monthly fees not listed here such as property insurance and utilities may apply. We recommend contacting a lender's reprensentative for information tailored to you. Home prices and HOA fees are approximate and may vary.

how small is the required down payment?

what other fees should i expect when purchasing my first home?

HOW DO I TAKE ADVANTAGE OF HISTORICALLY LOW INTEREST RATES?

what CAN I EXPECT MY monthly mortgage payments to be ?

Parc at Midtown - 1 br. condoHome priceMonthly mortgage payment*Down payment amount% Cash downEstimated monthly property taxesEstimated monthly HOA fees

Estimated monthly payment

$141,784.00$646.98

$7,089.205%

$303.65$102.96

$1,053.59 $1,602.94

$212,759.00$970.84

$10,637.955%

$455.66$176.44

Parc at Midtown - 2 br. condo

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2015 data is based on average of Jan. to Oct.

30-Year Fixed-Rate Mortgages Since 1980

www.surgehomes.com

MIDTOWN

UPPER KIRBY

HOUSTONHEIGHTS

WOODLANDHEIGHTS

GREATERHEIGHTS

MUSEUMDISTRICT

GREATERHEIGHTS

SPRING BRANCH EAST

610

610

45

69

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59

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67

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Proximity to amenities, such as parks, grocery stores, restaurants, bars, and terracesReduced daily commute times to work, Downtown, the Galleria, and the Energy CorridorCountless festivals, museums, outdoor shows, sporting events, and live music venuesThe pleasure of walking or cycling to destinations instead of always having to use your carHouston’s Inner Loop is currently benefitting from millions of dollars of municipal improvements for public areas

Not all Inner Loop neighborhoods compare; homes in areas west of Downtown generally have a much higher value than east of Downtown.

Why OWN A HOME IN AN ESTABLISHED INNER LOOP LOCATION ?

PARC AT MIDTOWN2401 Crawford Stfrom $142,000

MUSEUM BLVD4819 Caroline Stfrom $354,000

UPPER RICHTON3410 Morningside Drfrom $420,000

MIDTOWN4001 Main Stfrom $183,000

WOODLAND HEIGHTS2810 Beauchampfrom $329,000

SPRING BRANCH7500 Westviewfrom $238,000

GREATER HEIGHTS1800 W 15thfrom $244,000

MUSEUM DISTRICT1820 Binzfrom $423,000

HOUSTON HEIGHTS450 Frasier Stfrom $496,000

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UPCOMING COMMUNITIES:

See details at surgehomes.com

WHERE QUALITY MEETS DESIGN®

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DOWNTOWN

Prices are approximate and subject to changes