Buying a home can be an exciting time, but it can also get overwhelming quickly. After all, if you’re like most people, a house will be the biggest purchase you ever make. And often when you think you’ve found the right home in your price range, there can be hidden costs now or in the future. Here are five important factors to consider when shopping for a house.
1. Your Budget
First and foremost, every buyer should consider how much they can afford. This not only applies to the monthly mortgage payment but to all the other costs that come with homeownership, like repairs or annual maintenance.
If you have a spouse or partner, sit down and review your budget. Determine how much you both would feel comfortable paying each month. Also think about what kind of a down payment you’ll be able to make.
It can help to talk to a lender and get preapproved for a mortgage. Lenders will preapprove you up to a certain amount, and this will help you figure out how much you can afford. It’s also worth thinking over any payment protection such as private mortgage insurance (PMI), which is usually required for down payments under twenty percent. You may also want to consider life insurance, which can help your beneficiaries pay the mortgage if you pass away.
You may have heard people say “location, location, location” about real estate, and it’s absolutely true!
In many cases, prospective buyers will care almost as much about the appeal of the city or neighborhood as they will the actual house. This might be for things such as:
- Safety/crime rates
- Proximity to schools, parks, shopping, or restaurants
- Property taxes
A good strategy is to think about where you want to live and focus on a few neighborhoods.
3. Size of the House
Depending on the size of your family and needs, space can be a priority when shopping for a home. For instance, if you have three children and want them each to have their own bedroom, then you’ll want to limit your search to homes with four or more bedrooms.
Property size might also be a factor. For example, if you have four Great Danes, finding a home with a large fenced-in yard might be a priority.
4. Costs for Necessary Repairs
Even if the house seems ideal, it’s important to look closely for things that may need work, repair, or even replaced altogether. This may include:
- Outdated appliances
- Old, energy-inefficient windows
- Key structures that need replacing, like the roof
- Other central equipment such as the furnace or water heater
All these items could add a lot of unplanned expenses to your overall cost. Some of them will be obvious when you tour the house for the first time, others may be revealed by inspection. If your inspection reveals something costly like a broken septic tank, you can always try to negotiate with the seller for a credit.
5. Future Maintenance Costs
Even for things that may not need replacing, there are general annual upkeep costs. This can get fairly expensive depending on what’s required.
A large yard might look nice, but you may not want to purchase a larger zero-turn mower or hire landscapers. While swimming pools can create endless summer fun, they also must opened, closed, and treated with chemicals.
Finding your new home
Buying a home can be a rewarding experience. Just think of finding the exact house you want in your favorite neighborhood and finally getting your dream yard. While you’re shopping, just remember to keep your priorities in mind and look out for hidden and future costs.