Home ownership can be a rewarding experience that makes you feel at home in your neighborhood and community, but it’s also one of the biggest financial decisions many people make in their lives, which means it’s important to make sure you are prepared before buying your first home.
That’s why we’ve compiled this helpful checklist of things you’ll want to consider before finalizing your purchase. We hope you find it useful!
Determine Your Buying Price Range
Before you even think about what type of house you want, how much money you can spend, or how much down payment you’ll need to make a purchase, you need to determine your buying price range.
What is affordable for your family? In many cities, home buyers are advised to spend no more than 30% of their monthly income on housing costs.
You should also know what your local market will support—that is, if house prices start to plummet in response to changes in interest rates or other factors beyond your control.
To figure out whether buying a certain property would be right for you, gather information on average home prices and median incomes in your area; then use that data to figure out what an affordable price range would be (for example, $100k-$200k).
Then expand that range slightly and see which properties fall into it. Once you have an idea of where you stand financially, it will be easier to start looking at real estate listings!
Establish Your Ideal Location
Whether you’re planning to buy a home, rent an apartment, or live in a rented house, location is one of your most important concerns.
Do you want to be close to friends and family? Are schools important to you? Is safety a priority? Consider how much time you spend commuting, if at all. Remember that buying property is an investment – you want it to increase in value over time.
Consider whether there are commercial developments nearby, such as shops or offices. Traffic can be problematic for people who have long commutes, but it also generates business opportunities for local businesses such as gas stations and supermarkets.
Location is a major factor when buying real estate because some locations are more desirable than others; consider what your ideal location would look like before looking for homes to buy in your area!
If you’re ready to start looking for your first home, or have been on a few tours and are ready to apply for an actual mortgage, don’t skip pre-approval.
Getting approved by a lender before you begin your search helps streamline your home buying process: You know what you can afford; you know which houses to schedule an appointment for; and sellers know you’re legit. Plus, once you get pre-approved with one lender, other lenders are more likely to approve your application as well.
It all starts when you meet with a qualified mortgage professional. A good real estate agent will recommend someone in their network that you like working with. But there are lots of other great ones out there, too! The best way to find one is through word of mouth from people who love theirs.
Once you do find someone, they’ll help walk you through these next steps: Generate Income Information—You need to prove how much money you make to qualify for a loan.
How Long Will You Stay?
The average homeowner stays in their home for approximately six years before moving.
According to statistics, it is likely that you will stay in your home for a similar amount of time; however, these numbers can vary greatly depending on whether you’re planning to buy a house or condominium, and your financial situation.
One important thing to keep in mind is that houses tend to increase in value much more than condominiums do.
Therefore, if buying a condo rather than a house, ask yourself: am I willing to wait out an extended period of time where my home may not appreciate in value? Can I handle watching as other homes around me rise quickly in price? Will I be okay with potentially being forced to sell at a loss in order to make major repairs (an expensive roof, costly foundation issues)?
These are important questions to ask when deciding how long you plan on staying in your home.
What Do You Want in a Home?
For most people, buying a home is about more than just finding a roof over your head. It’s about selecting an environment that you can grow in, that feels like you and allows you to do what you want with your life.
To accomplish all of these things, it’s important to take some time to think through what exactly is important to you in a home and figure out how much they matter in terms of location, size and price point.
In fact, even if you’re absolutely set on buying real estate right now, taking some time to develop a list of requirements for a property will save you loads of stress down the road as well as money on wasted showings that don’t meet your needs.
If you aren’t sure where to start, here are a few ideas: How big is my family growing? Where do I need space for entertaining? What should my yard look like? What is important to me in terms of transportation (ie proximity to highways)? Do I want fireplaces or outdoor space? Is being close enough to friends/family important or can I enjoy that outside of my house (and apartment) via social media or nightlife options?
Making note of priorities up front will ensure that you only consider homes that align with your values and allow you to focus your energy on other aspects of making a deal work.
Once homebuyers get into looking at specifics, there are plenty other items one should consider checking off before placing an offer on their ideal house.
Are There Additional Amenities?
If you have your heart set on living in a certain area, it’s important to research how much access to local amenities that you’ll have.
If there aren’t nearby gyms or grocery stores, for example, can you get everything you need via public transportation? Will it be hard to find a place where you and your friends can go out for dinner without driving? Do nearby parks offer enough space to meet your leisure needs?
By familiarizing yourself with what amenities are available around where you want to live, buying a home in that area will seem more possible.
Getting the Mortgage Approved
When you apply for a mortgage loan, one of your biggest concerns is getting approved. It’s not uncommon to run into problems with credit or income documentation—or even have your loan application denied.
The good news is that there are steps you can take to help make sure you get approved for a mortgage loan so that buying a home is possible.
By planning in advance and working with professionals like real estate agents and lenders, you can put yourself in a better position to be offered – and ultimately approve for – a mortgage loan. Here are some ways you can do just that:
* Add up all extra income sources: Often, an overlooked source of money when it comes to figuring out how much home you can afford is other sources of cash like regular gifts from relatives and part-time jobs. You might also add up small recurring expenses (like $50 per month for cable TV) if they’ll continue throughout most of your mortgage term.
These dollars could help add up over time to a bigger sum by opening day at closing; ask about including them in your financial picture when applying for a loan through any lender.
Take some time now to add up all potential income streams; then use that total as your new salary figure on forms used by banks and others who lend money against home purchases.
Find the Right Realtor For You
Choosing a realtor to help you find your dream home is an important decision, one that shouldn’t be rushed or taken lightly.
The right agent can make finding and buying a house much less stressful and more enjoyable, while choosing the wrong one can end up costing you time, money and even your sanity.
Make sure you find a full-time real estate professional who will be able to find your dream home and negotiate the best price or you!
I’d love the opportunity to help you find and purchase the perfect home for you! Fill out the form below and I’ll send you my ULTIMATE BUYER’S GUIDE!!