Owning a home is the American Dream. But, if you aren’t ready to take on the full responsibility of that purchase, the dream of home ownership can quickly become problematic. So, how can you feel confident that you’re making the right move (literally)? Here are some questions to ask yourself to help you decide if it’s the right time to begin your new home search.
Do You Qualify to Buy a House?
You might have already run your financials through one of those online mortgage resources, and it says you “should” qualify for a home of a certain amount. The fact is that you probably don’t qualify for quite that much, so don’t start house shopping quite yet.
Talking with a real mortgage broker can give you a more accurate picture. Even if you have sufficient income and little debt, you still may not qualify for a mortgage if:
- Your credit history is less than stellar
- You have no or little credit established
- Haven’t been at your job for very long (under three years)
Mortgage underwriters look at a lot of factors when determining your credit worthiness, so the best advice any real estate professional can offer first-time buyers is to head to the lender’s office to find out how much you can really spend.
Do You Know What You Want in a House?
There are essentially two kinds of buyers:
- The ones that know exactly what they want in a house and are unwilling to settle for less
- The ones who have no idea what they really want, and are tempted to buy the first one they see
No matter which category you fall into, here’s the bottom line. Neither of these buyer types are going to be happy until they figure out what they want – what features are absolutely essential and which ones aren’t. To do that, try making three lists:
- Your Must-Haves: These are things you can’t live without (like a good school district, a large kitchen, two bathrooms, etc.).
- Like-to-Haves: These are the things that you would like to have in your new home (like a pool or a man-cave) but are not deal-breakers.
- Can-Live-Withouts: Amenities that are nice to have if they come with a new house, but are not expected (like an elevator or in-home theater).
Do You Know What to Look For?
Shopping for a house can be exciting, but do you know what to look for in a new home? Here are some important factors to consider:
- The condition of the home’s main features and structure: Be sure to check the appliances, furnace, plumbing, electrical, roof, and foundation of each home you consider. These are all vital aspects of a home and can be very expensive to fix in the future.
- The neighborhood: What is the surrounding area like? Is it safe? Friendly?
- Sufficient on and off-street parking for yourself and your guests: This may not seem important at first glance, but when you’re forced to round the block for the fifth time after a long day’s work looking for a place to park, you’ll definitely wish you had taken this more seriously.
- Space: Are the rooms in the house large enough? Is their ample storage? If you are a sports enthusiast, be sure there is space for your equipment, etc.
- School district: If you have kids, you’ll want to make sure the local schools live up to your expectations.
- Local restrictions: Some homes are located in areas with certain restrictions (like what color you can paint the exterior, items you can have in your yard, etc.). Be sure you understand the rules of the area, and what you can and can’t do.
Does Your Lifestyle Leave Room to Buy a House?
On paper, it may look as if you can easily afford that new home, but make sure to take a good look at your lifestyle to ensure your family can handle the extra expense of a mortgage payment.
Tip: About six months before you begin shopping for a new house, start setting aside the amount you expect to pay on your mortgage, taxes, insurances and maintenance. If, after six months you feel like you can handle these added expenses, go ahead and start shopping!
If setting aside that amount each month is a struggle, you might want to re-evaluate your finances and make the appropriate adjustments. Then, take all of that money you set aside and put it toward your down payment and closing costs.
Are You Prepared for the Extra Cost of Home Ownership?
Owning a home goes beyond the monthly mortgage. There are other costs many people don’t think about before making an offer. These include:
- Maintenance and upkeep
- Utilities (few renters think about the added utility expenses of owning a home like water bills, sewer, garbage, etc.).
Are You Handy?
It seems like there is always something to fix when you own a house, especially if you’re considering a fix and flip project. Before buying a fixer upper, consider if you have the skill and aptitude to handle those dream projects, or whether you’ll need to hire an expert to get it done, and what it’ll cost.
Finding the Right Real Estate Expert
Finding the right home can be an adventure. The key to making sure the process is fun and easy is finding a qualified expert with years of experience to get you through. Get the guidance you need and work with me. I would be thrilled to help you find a place to call home.