Buying a new home is, for most, the largest purchase you will ever make. Just as you do spend time thinking about the features and options you want in a new car or electronic device, you should spend time, before you buy, clarifying your goals for homeownership and what a dream home might look like for you.
Here are four quick questions to ask before you start looking for a new home.
Why do you want to buy a home?
It seems like a natural next step, a sign of achievement, a coming of age. Buying a home has long been viewed as a mark of success. There’s no doubt that real estate can be an excellent investment and can allow you to place lasting roots into the community of your choice.
At the same time, homeownership is a big responsibility that a new homeowner must be ready for. So, why do you want to buy a home? Is it because you no longer want to pay rent on something you don’t own yourself? Is it to gain outside space? The ability to remodel and do what you like to your living space? Is it part of an investment plan to leverage into additional properties or a newer or larger property one day?
All of those are strong, valid reasons. And those reasons can directly affect the type of home you purchase and its location, so it’s wise to determine your main goals for buying a home before you begin to look.
Where do you want to live?
The place you buy a home is the place you will spend most of your time, whether at nearby grocery stores or restaurants or the bank down the street. You should choose a place where you want to be, regardless of whether you consider this a long-term purchase or a starter home. Once you’ve determined a few neighborhoods that check your boxes, you can research home prices in that area. Do they fit your budget? Do you need to save a little longer? Are there other ways to purchase in that community that could help you buy sooner, such as buying a duplex in which rental income could contribute to your mortgage? Would a low down payment mortgage help?
Location is a vital part of the home buying decision. Realtors typically recommend you buy in an area of other residential, owner-occupied homes. Buying close to a school and other amenities can also add to the value of your investment. A coveted location can demand a higher asking price. Buyers need to weigh the options – is a higher asking price (with a higher monthly payment) in a popular area worth it for them or are there other affordable areas that offer similar benefits.
What is important to you in a new home?
This is the fun part. Have you watched home improvement television shows lately? Often, the buyers have a detailed wish list for any new home, and they can seem daunting. Urban setting or suburban? Big yard or no-maintenance patio? Two story or accessible ranch? Nailing down must-haves and nice-to-haves can make house hunting more efficient.
In addition, it can spur conversations about future plans for the house. Do you need an extra bedroom for visiting parents or for a nursery some day? Do you hope to use the home as a rental property after you move on? Would a duplex be a smart home loan choice?
How much home can you afford to buy?
Even before you begin house hunting, it’s important to connect with a mortgage loan officer and become pre-approved for a home loan. It can help eliminate homes that may not fit into your budget so you can focus on those that you can buy right away. It can also help identify and solve financial roadblocks to a mortgage approval.
Our mortgage lending team is one of the most experienced in south central Wisconsin. They have many years of experience with a wide variety of scenarios, homes and mortgage options. With this expertise, they can help you evaluate the best choices for a home loan and guide you through the process towards a pre-approval. Then all you have to do is find your dream home!
Contact a One Community Bank mortgage loan officer to get started on a mortgage pre-approval.