To begin with, make a list of your “Needs and Wants.” The more definitive and honest your priority list is, the better chance you’ll have of finding that dream home. Be realistic about reasonable compromise however, because the absolutely perfect home may not exist!
Here are some things to keep in mind when in the market for a new home. One of the biggest mistakes that a home buyer can make is to continue to look for that “ideal” house while passing up perfectly good houses in the process. If this is your first house, chances are it won’t be the last one you’ll buy. If you continue to delay your purchase, home prices will probably continue to rise and quite possibly, interest rates will too.
What kinds of things are important to you? Will you be near stores, schools, parks, restaurants, theaters, supermarkets? Do you mind being on a busy street or would you rather be on a quiet cul-de-sac? Is the house near public transportation? How far is it to work?
PREFERENCES:
Rate each of the following as: A – must have, B – high priority, C – medium priority, D – low priority.
___ Style of house – one story, two story, split level, etc.
___ Size of yard
___ Number of bedrooms
___ Number of baths
___ Bath in master bedroom
___ Eat-in kitchen
___ Separate dining room
___ Basement (Do you want a finished basement, or can you live without one?)
___ Fireplace
___ Garage (1 car, 2 car, carport, street parking?)
___ Windows in the kitchen
___ Windows in the bathrooms
___ Plenty of sunlight in the other rooms
___ Maintenance free windows, gutters, trim, siding
___ Lots of closet space (walk-in closets)
___ Adequate storage (attic, crawl space, basement, etc.)
___ Trees on the property and in the neighborhood
___ Children in the neighborhood
___ Air-conditioning
___ Type of heating system
___ Porch or deck
___ Dishwasher, garbage disposal
___ City water or well water
___ Septic system or sewers
- How much money will you need to purchase a home? You already know you’ll need a down payment. It can be as low as 3.5%, 5%, 10%, 20% or higher, depending on how much you want to invest in your home initially. Of course, the more you invest up front, the lower your payment will be. If you’re cash poor, but have a good income, you may elect to make a lower down payment and make higher house payments. But by making a down payment of less than 20% mortgage insurance will be tacked onto your loan making the payments significantly higher.
- You’ll have to come up with closing costs, which can be as much as 2-3% of the loan. How can you cut down on loan costs? A good lender can help you strategize your mortgage to keep payments within reach.
- Have a consultation with a lender or mortgage broker (see the Financing page) first and get clear about the real price range that is suitable and possible for you . Until you know what you can realistically afford, house hunting can result in devastating disappointments by shopping in an unrealistic price range. You’ll need a Letter of Preapproval from your lender before you begin to look at homes, so this will be your FIRST STEP toward actually buying the home of your dreams.
