If you’re buying a house, there’s a lot that you’ll want to know. The process can be intimidating for many, especially if this is your first time purchasing a house. However, knowing what you need to consider will make it much easier on your nerves.
There are six things to consider when purchasing a house; let’s begin!
Table of Contents
1. Your Monthly Budget
Before looking at homes, you must ensure that your finances are in order. Creating a monthly housing budget lets you know how much of a house you can reasonably afford. While still saving money and having more than enough for your necessities.
You’ll want to include any expenses you must make each month, including utility bills, property taxes, and the mortgage. Purchasing property is a significant financial commitment, so you must sit down and make a budget that you can stick to.
You shouldn’t sign anything until you have your monthly budget in place. From there, you can shop confidently since you know you won’t choose a home out of your range.
2. Potential Interest Rates
According to a Bankrate survey, the average mortgage interest rate is 5.57% for a 30-year fixed mortgage. However, you’ll want to try to find options that go lower than that. For example, 3% or 2% for interest in your new home would be ideal.
Why? Well, when you have access to the lower interest rates, you pay less over the life of the loan. Let’s do an example where you have a 30-year mortgage of $100,000. With a 5% interest rate, you’d pay about $96,180 in interest over the 30-year term.
Conversely, if the interest rate on that loan is 2%, you’ll pay about $38,875 in interest before paying off the loan. That’s a huge difference! Plus, you’ll have a much lower monthly mortgage bill with the lower interest rate option.
It can be tempting to go with the first offer you receive. However, you should always research interest rates in your area to determine if you’re actually getting a good deal.
3. Research the Location
Location matters when choosing a home. You’ll want to know that you’ll feel at home in the community before moving there. It’s essential to consider local school districts, noise levels from traffic, and more. Many people also recommend that you consider the commute to your workplace before committing to moving.
It would be awful to sign off on a mortgage only to discover that you dislike the area. Always make sure you visit in person and have a look around the neighborhood before committing.
It doesn’t matter how perfect the house itself is if you don’t like the location— so make sure you don’t ignore this crucial consideration in your housing research. Investopedia says the site is critical because you can always remodel the house but can’t move it from that property after you buy it.
4. Talking With a Real Estate Agent
Next, you’ll want to consider meeting with a real estate agent. These experienced professionals will know how to represent you best by searching the housing market for homes in your price range. The realtor can assist you in making a wise purchase and obtaining your dream home.
Most importantly, a real estate agent can get you a better deal as they often negotiate with sellers. Homes you didn’t imagine you could buy before suddenly open up to you, so it’s always a good idea to work with an expert realtor when you can!
Real estate agents can offer you essential guidance, making buying your first home go smoothly. While it costs more to work with an agent, it’s sure to be worth it, so always consider doing so. Many can answer simple questions over the phone and offer you quotes, allowing you to know the cost of working with them beforehand.
5. The Size of the Home
Of course, you should consider the size of the home too. Do you want a small or large home? You might feel impressed when seeing a large house, but you must consider if you need the space.
It will cost much more to buy the larger property space, plus you’ll have to pay more for heating and cooling. Large homes are even more physically demanding because you’ll have to spend more time and effort cleaning them too. However, you’ll need the extra space if you have a big family.
Before looking at homes, create a list of what you want. You should include the size of the house and how many bedrooms and bathrooms you need. That way, you won’t get a place with more space than you can use.
6. Storage Space
People often forget to consider storage space in a home during this process. You might not have a lot of stuff if you’re moving from a small apartment. However, you’re sure to collect more furniture, decor, and sentimental items as time goes on in your new home. You wouldn’t want to feel cramped, so here’s what you need to consider:
- Does the house have enough kitchen cabinets?
- Does the house have enough closets?
- Can I store belongings in the attic or basement?
- Is there a shed or garage for more storage?
You can always convert rooms in the home into storage space. However, converting rooms into storage also means that you have less house space to live in— making it essential to consider your storage needs first. Generally, you want your home to have 10% storage space for the total square footage.
During visits to for-sale houses, ask the guide where the storage spaces are. New home buyers tend to overlook this aspect, which can cause stress later when you run out of room for your belongings.
Consider Everything You Can
If you have the time to choose a home slowly, take it! You don’t want to feel pressured into buying a home you don’t love. It helps to make lists of everything, so you can see what you want in your dream house at a glance.
To summarize, there are several things to consider when purchasing a home. As long as you go over them all in detail, you’ll surely like the home you choose.
