Buying a home is an important decision that comes with a huge financial mandate, making it a process that must be well-thought-out before settling for any choice. As a responsible future homeowner, it is your responsibility to know the critical factors to evaluate when in the market for that dream house. To help make this process easier for you, here are 10 factors to consider when buying a home.
1. Current market conditions
Understanding the local real estate market is the foundation to making a smart decision about when and where you should buy your home. Since it takes more than meets the eye to master the local market indicators, it is best to consult with experienced realtors to help you navigate these waters and master the best practices of investing in real estate. As a rule, your focus should be on the primary elements currently affecting the supply and demand of property in a local market, demographics, cost of living, and the local economy.
2. Your financial state
Future financial expectations must never blind you from evaluating your current capabilities as a buyer in the property market. Before you rush to make those decades of commitment to paying mortgage premiums, take time to evaluate how much you can afford. Firstly, you will need to ensure you have a good credit score as this significantly affects the mortgage rates you will be eligible for. Next, you will need to determine your debt-to-income ratio to ascertain how easy or difficult it will be to make those payments.
3. Payment plan
Different lenders have varied payment plans extended to their clients, and you need to thoroughly evaluate these options before you decide to buy a home. Today, a fundamental question you need to ask yourself is whether you should make a large or small down payment for your home. While this decision is largely determined by your income limits, current savings, and lender options available to you, a substantial down payment will save you thousands of dollars in mortgage fees and interests. As such, you should determine whether it is worthwhile to keep staying in a rental and save for your down payment or take a piggybank loan to help meet these initial costs.
One of the most important factors to consider when shopping for a house to buy is the location. Whether you would love to stay in the most affordable neighborhoods of New York City or its wealthiest suburbs, location is of great importance. Always remember that you can make an ugly house attractive, but you can never single-handedly make a bad location attraction. It is for this reason that location remains to be the biggest determinant of a property’s current and future value in every market.
5. Access to basic amenities
A good location must always be complemented by access to basic amenities that make the neighborhood livable and fun to stay in. As such, before you decide to buy that house because of its affordability, you need to determine its closeness to good schools, major shopping centers, hospitals, and major highways, among other social infrastructures. Always examine these factors in relation to your lifestyle and family needs as a home needs to support your daily activities without any inconveniences.
In the pursuit to find your dream home, you must prioritize staying in a safe neighborhood that will make raising a family simpler. To avoid taking chances, find out about the crime rate of the neighborhood you want to live in before you start shopping around for a house. Beyond doing your research online, get a feel of the neighborhood to determine whether it will be worthwhile to invest in such an area.
7. Maintenance costs
A common mistake most first-time homeowners make is undermining the actual costs of maintaining a home. Avoid making this costly mistake by taking the guesswork out of this process and setting aside a home maintenance budget. Generally, you should be prepared to spend between 1% and 4% of the purchase price of a home on its maintenance. Some of the expenses you need to give priority to include:
- Annual property taxes
- Insurance fees
- Heating and electricity
- Water and sewerage costs
- Property repairs
8. Age and condition of the house
A home needs to be a long term investment, considering how much money you will spend to acquire a property in any location. Therefore, you should take an interest in the age and condition of every house that comes under your radar before you choose to sign those agreement papers. This will help you avoid the high costs and challenges of remodeling an old house that often make the true property ownership costs outrageous.
An intelligent way to avoid these problems is to hire professional and independent home inspectors for in-depth scrutiny of a home. These specialists will then provide you with reports showing if you might require any expensive repairs and renovations after a few years.
9. Future needs
Are you planning on growing your family? How long do you plan to stay at a particular location? Always consider your future needs when evaluating where and when you should buy a house since this significantly influences its long term value. These needs should also dictate the type of house to settle for and the features to prioritise, such as the number of bedrooms, bathrooms, and lot size.
If you are worried that you are likely to outgrow a home in a few years or have to move to a different state because of your job, it could be best to wait until you are confident about your decision.
10. Compromises you can handle
Most homebuyers have to bear with some missing elements when they finally decide to buy a home, and you should be prepared for some compromises. These could include the yard size, room themes, and other perks that you can live without. Nevertheless, you must always draw a line on the compromises you can make by remaining firm on the features and aspects you highly value in a home.
The home buying process is never simple, but with the help of these tips, you will be better prepared to walk this journey and make your property ownership dreams a reality.