A house is a financial purchase. But because it also will become a home, it can be an emotional purchase. So how do you know if you’re purchasing the right home? Here are a few things to consider, even as you’re salivating over granite countertops, a large fenced in backyard or the master suite of your dreams!

Know your price range and aim to keep it.

Something I see often with first time home buyers is that they start out by looking at homes at the top of their price range. With today’s lack of inventory, and offers being submitted well over asking price, this can lead to a person exceeding the target price range they had in mind. 

A term we use in lending when a person can afford the mortgage payment but that is all they will be able to afford is “house poor.” This generally means that your lifestyle is your home, not travel, not purchasing other recreational items such as travel trailers, boats, snowmobiles, etc. Your home is all you can afford. For some people that fits their lifestyle just fine, but for many it will be a change.  

Just because you may qualify for a higher loan amount, doesn’t mean you should pursue it. Purchasing a home includes not only the loan amount but property taxes, insurances, interest and closing costs. And it’s always a good idea to have some funds leftover for future repairs and upkeep of your new home.

Consider what is best for you and your family.

Think about not only today but the future in terms of how your home will suit you and your family. With many people continuing to work remotely it has brought about home buyers desiring a spare bedroom for office space or a backyard that they have always desired. Maybe living in a subdivision closer to town is what is best for your family or maybe you want country living. Ultimately, the experience that you want for your daily living is unique to you. 

Make a list of your needs, wants and “must haves” in a home - but know the differences among those and be flexible.

Everything on your list may seem like a “must” until you begin looking at homes and realize it’s rare to find one with everything. Instead, pay close attention to homes that have many of them and think about what you might be able to “give on.” This is especially important with the next item, which is…

Location, location, location.

In my opinion, location should be the highest-ranking consideration when thinking of your desired home. If you can find a home in the neighborhood you are looking for - whether it’s in a certain school district or close to work - that might outrank a kitchen that has wallpaper that you want to take down or other cosmetic items. Ask yourself if the location is worth refacing cabinets or doing a small renovation to make that house into the home of your dreams. 

Don’t settle.

Today, more than ever, with the lack of inventory of homes to choose from, I recommend to my clients to hold out for what they are looking for. If they are able to wait another six months to a year, the market may change.  Settling on a home that will not make you happy may not be a good decision. I don’t want my clients to look back on one of the most important purchases of their lives and wish they had waited for a house that checked off more of their list.

Your home is meant to be your sanctuary and a safe place to return to at the end of a long day. Taking all of these items into consideration is important not only for today but how you enjoy your home in the future. To gauge what mortgage will fit your situation best, contact me at rthompson@icbk.com or reach out to any member of our mortgage team.

Written by Rose Thompson

AVP - Banking Services Manager, NMLS ID 523900

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