The first thing you’ll probably ask yourself when looking for a home is “Should I rent or buy a house?”
Buying a house typically requires a large down payment and many other expenses. It’s also important to be sure you’ll be able to live for at least a few years. Depending on the terms of the mortgage, you probably won’t pay down real equity for at least five years.
On the other hand, if you find a home in a community where you’re ready to put down roots, it will offer more stability, potentially more financial benefits, and you’ll have a place you can change as you like to make it your own.
But what are the questions you should ask once you know that you are ready to buy?
What Will My Long-Term Future Look Like?
While no one can predict the future with 100 percent certainty, it’s important to consider the short- and long-term when looking for a home.
If you’re single, do you think you’ll get married? Do you plan to have kids? Instead of buying that cute one-bedroom, if you can afford to do so you might want to buy based on what your future might look like at least a few years down the road.
On the opposite end of the spectrum, if you’re retiring soon it’s important to consider aging – will the home meet your needs as you grow older, perhaps having to negotiate steep stairs or mow a vast lawn?
Which Neighborhoods Meet My Needs?
As they say, location, location, location. The neighborhood is one of the most important things to think about when looking for the right home as it will make a big difference in the quality of your life. Do some research to find which meets your needs.
For example, if you have school-age children, will they have access to quality schools? How long will your commute be to work? How safe is the area? Is it noisy or will it provide a more tranquil setting?
Assuming you aren’t making a long-distance move, try to drive through neighborhoods you’re considering at various times of the day to observe what they’re like. If possible, try to chat with at least one of the residents to find out more.
What’s My Credit Score?
Your credit score could be a major factor in your home buying decision. The higher your score, the better the mortgage terms and interest rate, and the more you can afford to spend.
A lower credit score could impact your ability to secure a loan, or at minimum, impact the interest rate. Pull a copy of your credit report to know where you stand – if there are errors, take the time to get them corrected before applying. Getting preapproved for a mortgage will ensure you’ll be shopping in your price range.
How Do I Really Feel About a Fixer-Upper?
If you find that a new home in perfect or near-perfect condition in your price range isn’t in the realm of possibility, think about how you’d feel about buying a fixer-upper. That can take a lot of sweat equity, are you ready for it? If you are, you could end up with a great deal but it also has the potential to turn into a money pit.
What Will All the Other Expenses Be?
In addition to the home’s price tag, there are closing costs and other expenses, including your move and furnishing the place. It’s important to make a list of all the expenses to be sure that you don’t get yourself into too much debt, one of the worst mistakes any homebuyer can make.
If you have enough for everything but the furniture and decor, you might be able to buy used or work on one room at a time, prioritizing those you’ll need most.