- Buying a new house is a major financial commitment.
- Finding the right home is key to a successful transaction.
- Sticking to your price range, getting preapproved, and focusing on the permanent features can ensure you end up happy with your purchase.
These three rules can help ensure you don't regret your home purchase.
Buying a new home is one of the biggest life decisions you'll make. The house you buy will impact your financial life and personal life for the long term. You'll be making mortgage payments for decades to come and likely spending many years of your life at the property.
The good news is, if you follow a few simple rules, you can maximize the chances you'll end up happy with your house -- and that it will be a good investment for you. Here are three rules that would-be homeowners should seriously consider following.
1. Don't buy more than you can comfortably afford
Many people end up house poor because they stretch to buy a home they want even if it’s too expensive. Others end up borrowing too much because they simply accept the largest loan the mortgage lender will give them without considering the impact of a big monthly housing payment on other financial goals.
You don't want to find yourself facing bills that are a struggle to pay, or that eat up so much money that you have too little left for other things. To make sure that doesn't happen, take the time to think about how much you can fit into your budget. Then get a mortgage that keeps your payments at that level.
And don't forget to take other housing costs into account, such as property taxes, insurance, utilities, and maintenance, as these affect affordability, too.
2. Get mortgage pre-approval before you start looking
There's little use in wasting time looking at homes that are too expensive. And you don't want to fall in love with a house, only to have a seller not accept your offer because they aren't confident you'll have the cash to close the deal.
You can avoid both of these problems by getting pre-approved for a mortgage before shopping for a home. This doesn't guarantee approval, but it involves providing a mortgage lender with specific details about your financial situation to get a loan offer. If all goes well and the house appraises for enough and nothing changes in your finances, you should get the loan you were pre-approved for. That means you'll know before you find a house just what you can afford.
Your lender will also provide a pre-approval letter, which you can include with your offer to show sellers you're a serious buyer with a financing commitment.
3. Focus on features you can't change
Far too many people end up looking at features that are easy to modify and making up their minds about whether they like a house. For example, things like paint color or updated kitchen cabinets often sway people into buying -- or not buying -- a house because they create an emotional reaction.
The reality, however, is that most aesthetic features of a home can be easily modified. Rather than prioritizing these factors, look at things you can't change that will affect your happiness with the house and its value over time. This includes the location, square footage, yard size, school district, and surrounding traffic conditions.
By focusing on the fundamentals of the home, getting pre-approved, and making sure you aren't buying too much house, you can maximize the chances of successfully purchasing a house that makes you happy for many years.
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