5 Things to Consider When Shopping for a New Home
Home buying can easily become a learn-as-you-go adventure. Make a mistake, though, and either your wallet will be hit, or you’ll miss out on a great home. So that doesn’t happen, read through these top 5 things to consider when shopping for a new home.
#1: Is it Move-in Ready?
Move-in ready houses cost more up front and will likely add a little bit to your monthly mortgage payment (rough estimate: $50 a month for every $10,000). The great thing about these types of investments is that there’s likely nothing you need to immediately worry about in regards to home repairs or home updates. Your weekends can be spent at home rather than the hardware store.
However, ‘perfect’ houses are only perfect for so long. No matter what house you buy, you’ll likely spend about 1% of the purchase price on maintenance each year.
#2: Is it a Fixer Upper?
Fixer upper homes will save you money on your home loan, as they typically cost less to purchase. But keep in mind that the more money you save by buying a fixer upper home, the more money you’ll likely need to spend on upgrades and repairs up front. If you decide to pay for the upgrades with a credit card instead of cash, the interest you’ll pay on credit card bills could easily negate any savings you got on the mortgage loan.
Of course, fixer uppers allow you the opportunity to make the house completely your own. Depending upon the condition of the house when you buy it, a lot of updates and repairs can take place over time. If you decide to sell it, you run a good chance of getting a return on your investment and then some.
#3: What’s the Neighborhood Like?
As you shop for homes, don’t just think about the home itself; also consider the neighborhood. Is it the place you want your kids to grow up? Take a look at the schools. How are they performing on state tests and the SAT? What’s their dropout rate? All of these are indicative of the type of learning environment your children would be exposed.
Likewise, what type of crimes are in the surrounding area? Don’t just check the home’s neighborhood, also check the neighborhoods around it as well.
#4: Should You Wait for a Perfect Housing Market?
Waiting for a buyer’s market versus a seller’s market is a fool’s game and is nearly impossible to predict (ask any real estate tycoon). If you’re ready to start house hunting, start shopping now. Don’t wait. If you find a house you like, put an offer on the table. The cost difference between the two housing markets is rarely different enough to worry about.
When you wait, you just increase the likelihood that you’ll miss out on a great opportunity.
#5: Should You Wait to Get Pre-Approved?
If you’re ready to buy a home, don’t wait to get pre-approved for a mortgage. When you find a house that you want, you’ll be able to make a stronger offer if you’re already pre-approved for a loan. Why? Because pre-approval indicates to the seller that you can afford to buy the home. Sellers are much more likely to jump on a home offer from a buyer who already has his or her finances in order. Learn more about what it means to be pre-approved.
Use this handy Home Comparison Checklist to take notes on the homes you visit. You can then refer back to your notes to help you choose the best home for your needs and make an offer.
Herring Bank is here to guide you through the process from start to finish. Give us a call at (866) 236-4779 or request a call below to discover how we can lend the way to your next home!