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Got that shiny car? Now it's time to think about where it's gonna park! Before you start picturing cozy movie nights with popcorn and blankets, weekend get-togethers or backyard BBQs, there's some groundwork to cover. Let’s get to the heart of what matters when buying a house.
What To Look For When Buying A House?
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1. PRICE
For many potential homebuyers, the purchase price of a home tops their worry list.
Overspending on a house can strain finances, especially when considering monthly mortgage payments. Review your down payment and monthly mortgage costs to match your budget. A preapproval letter can help determine the affordability of your desired home. It reveals how much house you can afford and the required down payment, helping you make informed decisions.
💡KreditSanta’s Pro Tip
To find a monthly payment that fits your budget, follow the 28/36 rule: Don't spend more than 28% of your total monthly income on housing costs and keep your total debts, including your mortgage, credit cards, and loans, below 36% of your income.
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Calculate your debt-to-income ratio to understand how much of your income will go towards housing expenses.
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Remember to budget for expenses beyond your mortgage, like property taxes, insurance, and upkeep.
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Use KreditSanta’s tools and resources to explore listings and compare prices for homes with similar features and amenities.
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Pay attention to any trends in pricing, such as increasing or decreasing property values, that could impact your decision.
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Take note of any upgrades or renovations that may add value to the home.
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Factor in potential repair or renovation costs if the property needs work.
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2. LOCATION
Now that you’ve figured out your budget, identify neighborhoods within your affordability range. Location ranks high for home buyers due to its impact on daily routines like work commutes and access to amenities. Unlike the appearance or size of a property, the location remains fixed.
Here are key factors to evaluate -
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Community Vibe: Explore the neighborhood to experience its atmosphere and vibe. Are people friendly? Is there a sense of community? Trust your gut instinct—it matters!
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Noise Levels: Consider the level of noise pollution from traffic, airports, or other sources that could affect your peace and quiet at home.
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Commute and Transportation: Evaluate your daily commute to work or school. Is public transportation accessible? Consider traffic patterns and travel time to ensure a smooth commute.
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School Connections: Research schools in the area and their affiliations with the community. Having good connections with schools can make families feel like they belong and get support.
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Walkability: See if you can easily walk to nearby shops, cafes, and parks! A walkable neighborhood adds to your convenience and overall well-being.
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Home Appreciation: Examine historical home value trends and future growth potential. Buying a home in an area where property values increase can grow your investment over the years.
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Convenience and Amenities: Look for amenities like grocery stores, parks, restaurants, and entertainment venues nearby. Easy access to these conveniences can enhance your quality of life.
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Flood Risk: Investigate flood risk in the area. Check flood maps and inquire about flood insurance requirements to protect your investment.
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Ownership charges: Know the local property tax rates and any extra fees in the area. These costs can significantly impact your overall housing expenses.
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School Quality: If you have kids or plan to in the future, check out the local schools. Consider factors like academic performance, extracurricular activities, and the overall learning environment.
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Criminal Activity: Focus on safety by checking the crime rate. Look for neighborhoods with lower crime rates to ensure the safety of your family and belongings.
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Property Development Laws: Get to know the rules and limits for building and land use in your area. Ensure the area aligns with your future plans for the property and any renovations you may have in mind.
Basically finding the right location involves considering various factors beyond the house itself. Take the time to explore different neighborhoods and prioritize what matters most to you and your family.
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3. SPACE, STYLE, & ELEMENTS
A variety of housing types are available, including detached single-family homes, condos, and townhouses. While single-family homes offer space and privacy, condos can be more affordable and may include amenities like gyms or playgrounds.
📖 Read More >> How much house can I afford?
Think about what you need and what you can afford when picking the best choice for you.
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Rooms and Sizes: Ensure the house has enough bedrooms and bathrooms to comfortably accommodate your family. Consider the layout and size of each room, envisioning how they will be utilized in your daily life.
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Outdoor Space: Assess the backyard or outdoor area for its size, privacy, and potential for landscaping or outdoor activities. Determine if it meets your needs for relaxation, entertainment, or recreational pursuits.
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Parking: Check for adequate parking options, including garage space, driveway capacity, and street parking availability. Consider the convenience of parking arrangements for you and any guests or visitors.
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Natural Light: Pay attention to the amount and quality of natural light entering the home through windows and skylights. Bright, well-lit spaces can enhance mood, productivity, and overall well-being.
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Square Footage: Evaluate the overall size of the home to ensure it meets your space requirements. Consider factors like the number of occupants, furniture placement, and room for potential expansion or renovation.
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Community Dynamics: Get to know the neighborhood dynamics, including demographics, HOA regulations, and community events. Consider how these factors align with your lifestyle, values, and preferences.
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Style & Design: Consider the architectural style, interior design features, and overall aesthetic appeal of the home. Look for elements that resonate with your personal taste and lifestyle preferences.
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Floor Design: Evaluate the floor plan to ensure it matches your lifestyle needs and preferences, including room placement and traffic flow. Ease of movement between living spaces is crucial to consider.
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Home Age & Condition: Assess the age and condition of the home, including the roof, foundation, plumbing, and electrical systems. Look for signs of wear and potential maintenance or repair needs.
📑Important Reminder
Don't forget to include a home inspection when making an offer. A qualified home inspector can notice things you might miss, and it also helps you understand the home's maintenance requirements.
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Storage: Assess the available storage space, including closets, cabinets, and additional storage areas like attics or basements. Determine if there is enough room to accommodate your belongings and minimize clutter.
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Energy Efficiency:Look for energy-efficient features such as insulated windows, modern appliances, and energy-efficient HVAC systems. These features can help reduce utility costs and minimize environmental impact.
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Neighborhood Amenities: Consider nearby amenities like parks, schools, shopping centers, and public transportation options. Evaluate how these amenities enhance your quality of life and convenience.
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Safety & Security: Evaluate safety features such as smoke detectors, security systems, and neighborhood crime rates. Prioritize a secure and safe environment for you and your family.
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Future Expansion: Consider the potential for future expansion or renovation projects to accommodate your evolving needs and preferences. Evaluate the feasibility of making changes to the home to suit your long-term goals.
As you explore the intricate details of space, style, and elements, remember that finding your dream home is a journey that involves careful consideration of your lifestyle, preferences, and future goals.
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7 Common Red Flags in Home Buying
Before you sign the dotted line, it's crucial to keep an eye out for potential red flags when buying a home.
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Poor Flooring Work: Uneven surfaces, creaking floors, or visibly poor craftsmanship could signal underlying structural issues or inadequate maintenance.
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Nearby Water: Proximity to bodies of water such as rivers or lakes might increase the risk of flooding or water damage, impacting the property's safety and resale value.
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Poor Maintenance: Signs of neglect, such as overgrown landscaping, peeling paint, or a neglected roof, could indicate ongoing maintenance issues that may require costly repairs.
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Mold: Musty odors, visible mold growth, or water stains could indicate moisture problems, inadequate ventilation, or hidden water damage, posing health risks and structural concerns.
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Improper Ventilation: Inadequate airflow or ventilation systems may lead to moisture buildup, mold growth, and poor indoor air quality, affecting the health and comfort of occupants.
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Poorly Installed Windows: Windows that are difficult to open or close, drafty, or showing signs of moisture intrusion may indicate improper installation, compromising energy efficiency and structural integrity.
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Water Damage: Stains on walls or ceilings, warped flooring, or a musty odor could suggest past or ongoing water damage, potentially leading to structural issues and health hazards.
Remember, thorough inspection and due diligence are essential to ensuring your future home is a safe and sound investment.
The Big Oops You Want to Avoid
You might stumble upon a home that ticks all the boxes and avoids any red flags we've discussed, which is excellent news! However, there's a critical mistake you must avoid: buying a house that stretches your finances too thin.
Even if the property seems perfect and offers everything you've dreamed of, it can quickly turn into a nightmare if the monthly payments strain your budget. That dream home could become a burden if it eats up too much of your income.
So, how can you tell if it's affordable? Your monthly payment, covering HOA fees, PMI, property taxes, and homeowners insurance, should not exceed 25% of your take-home pay with a 15-year fixed-rate mortgage.
If the house fits within your budget and meets all your criteria, go ahead and take the plunge!
But if it's beyond your financial reach, it's essential to walk away. While starting anew might be disappointing, saying no to a home you can't afford will prevent future financial stress.
If you're struggling to find homes within your price range, check out our comprehensive house hunting guide for valuable tips.
The Final Point
Don't be deterred by surface-level details. Paint, hardware, and fixtures can all be altered affordably. Minor issues, such as a cracked switch plate, typically don't require the seller's attention.
Additionally, remember that the current furnishings and decor will be removed by the sellers. Envision how you'll customize the space to reflect your own style and preferences.
Start your home loan process online with KreditSanta's Home Loan Experts.