Whether you gauge by size or price tag, there’s no bigger purchase than purchasing a new house. The real estate market has its ups and downs, with something as small as the season impacting the sticker price. Given the magnitude of this particular purchase, there’s a ton of things to consider beyond the general question of “Can I afford this?”
If you are searching for a new place, you’ve probably already looked into loan options to determine a feasible price range for your purchase. To make an offer on a house, you’ll want a pre-qualification letter—just FYI. Regardless of the amount approved, check out our post outlining how much you should actually spend when buying here. This particular post helps you with the next few steps.
When looking for your next home, ask yourself these questions:
- Am I looking for a starter home or a forever home?
- What does my family-life look like? Is that going to change in the near future?
- How far is my commute to work?
- How close are preferred amenities? What amenities will my budget allow?
- What will a given house do to my monthly expenses?
- How much can I set aside for surprises?
- Where am I willing to compromise?
Each question carries a certain weight requiring a more detailed analysis in your search.
Home and Family:
The first few questions can and should be considered together. Are you single, married, and/or expecting children? Or do you believe any of those things are going to change sometime soon? Build this into your house search. Be cognizant of the sizes of homes and lots you’re looking at. Do you need something with less maintenance, or something you and your family can grow into? If children are a part of the equation, what does the school district look like? Are there childcare options local or private schools nearby? What about pets and vets? Do you have enough yard for those pets? Or are you more concerned with space from neighbors? Maybe a house on a corner lot provides more privacy for you and your family… Or a townhouse near a park is more your style?
Commute:
Where are you working, and do you plan on staying there? What time do you have to be at work each day and what time do you leave the office? Do not set yourself for failure! A 45+ minute commute may sound doable, but are you really going to miserable making that drive at least twice a day for the foreseeable future? Are you willing to pay for the gas, added wear and tear on your car, and probable increase in fast food (unavoidable when you’re spending that much time driving)? Is this something you can handle physically?
Amenities:
What does your home-life look like? Do you cook or eat out for nearly every meal? Aka, would you rather be closer to grocery stores or restaurants? If you are thinking about purchasing meals on the go or living off of delivery services, is this something you can actually afford? Are you hoping to make quick trips to the gym or be in close proximity to an area that accommodates electric vehicles? If you are trying to save, or don’t have funds to expend outside of necessities, perhaps you need some distance between your house and things like restaurants, shopping centers, or other temptations?
Expenses:
How are you going to budget around your mortgage? Have you considered the increase in general utilities? For example, the increase in your electric bill to cover the air conditioning for a larger home? What about HOA fees? Are you able to take care of a lawn or will you need the assistance of a service? Will you be able to pay the property taxes after a year or so—especially in an expanding area where property values tend to grow quickly? Were you planning on renovations and how much will this hurt your bank account?
Surprises:
Do you have enough saved in the bank to cover the unfortunate reality of hidden issues in a new house? Can you cover the cost of a plumbing disaster? Or mold that has been growing for who knows how long? If you purchased the house with renovations in mind, are you prepared to bring basic systems up to code, like electric wiring?
Compromise:
What is most important to you when purchasing this home? Finding the perfect school district and environment for your current or future children? Eliminating travel from home to work and places you frequent? Putting your own spin on an older property? Finding a place that is completely turnkey? Are you prepared to cut down on renovation expectations should an unforeseen issue blow the budget? Drive a little farther each day so your kids can be at that certain school? Accept less house in exchange for more land?
Stay Rational
-B&T