Finding a Home: What to Look for

You want to buy a house. Maybe it has been your dream since the day you mapped out your life’s plans as a meticulously detailed student, maybe you are getting married and you feel that a new home would set your life on the right path or perhaps you are tired of seeing your monthly rent check build equity for your landlord rather than yourself. You know what you want, but if you do not cover all the bases, what you do not know about looking for a home could cause problems in the long run.

When finding a home, you need to look for more than a pretty house in a pleasant neighborhood. After all, that can mean different things to different people. Take time to think through what home features matter to you and your family, which features you can afford and how you are going to get the most bang for your buck. This preparation could prevent you from missing something that could negatively impact you or your children’s lives.

Home features

This is usually the fun part, but what really matters? You might find several homes that look great, but you need to break down your wants and needs to figure out which house has the best chance of fitting your lifestyle and making you happy. Ask yourself a few questions and then list your requirements. What do you want? What must you have, and what can you do without? How does your budget alter what you must have and what can be relegated to the maybe list? Here are a few features to consider:

• Does a one- or two- story home work best for you?


• Do you want a traditional home, loft-style condominium, duplex or high rise?


• Is a big yard important or a pool?


• Are you comfortable having neighbors on all sides or would you prefer to back up to a creek, wooded area or park?


• Are the roads near the home noisy? Find out if a train runs through the area or if rush hour traffic makes noise levels too high.


• Are nearby streets busy and dangerous?


• Do you want a new home or is there a certain period of architecture that appeals to you?


• Do you have the interest, time and money to buy a fixer-upper?


• Do you need the home to come equipped with appliances or have you budgeted for these?


• Would you prefer a home in a gated community, or do the homeowner’s fees associated with these communities seem unnecessary?


• Different regions of the country have different weather-related concerns. Are you in an area prone to tornadoes or flooding? Is a basement, crawl space, storm shelter or stilts necessary for safety?


• Do you like a neighborhood with old shade trees or young saplings as are often found in newer neighborhoods?


• Is a cul-de-sac important to you? This often means less traffic and may promote a sense of community within the houses in the loop.


• Some neighborhoods have a higher ‘walkability’ level than others, meaning you can easily walk to stores, schools, parks and even places of employment without being dependent on an automobile. Planners are designing some newer neighborhoods with this in mind. Not only does it promote good health, but neighborhoods with people who know each tend to be safer.


• Similarly, consider whether a house is in a ‘backyard’ or ‘front yard’ neighborhood. In backyard neighborhoods outdoor activities generally take place behind the house. You may not see many sidewalks, people walking or children playing out front. The house itself may seem overwhelmed by the garage with few windows. In a front yard neighborhood you can see activity as you pass. People sit on porches, kids play in the front yard and houses may surround a neighborhood park, giving parents a good view of the children playing there.


• Figure out what type of location would make you happy. Decide if you want to be near relatives, a church, shopping, parks, mass transit, restaurants or nightlife. If you want to get away to the country, find out how long the bus ride will be for your kids.


• What type of heating or air conditioning source is used? Does the home use gas and electric or all-electric? Once you narrow down house choices, find out monthly averages for utility expenses.


• Find out if the area offers satisfactory cable, Wi-Fi or phone service.


• Are ‘green’ features important to you? Some communities cater specifically to this growing trend by incorporating solar panels, energy-efficient appliances, recycled building material, tankless water heaters, paving material that allows water to seep into the ground, landscaping that incorporates plants native to the area and other such features. If the home you can afford does not have these features, can you retrofit one with green technology and design elements?


• If you have school age children or plan to have them while living in the home, find out about the quality of area schools. Local school districts often have websites that provide some of the information you need as do independent organization that provide rankings and reviews. Look for high test schools, a friendly staff, a skilled principal and options for extracurricular activities Does the school have an anti-bully program that teaches children to appreciate each other’s differences, a gifted program or an English-as-a-Second-Language option? How safe is the school? Recognize that you may plan to move again in three years, but circumstances could prevent it.


• Are you excited about the prospect of having a lawn to mow, snow to shovel or a house to paint, or do you want to avoid as much of this as possible? If convenience outweighs cost considerations, you may want to find a home in an area with a homeowner’s association. Know ahead of time what the HOA covers and if prices are likely to go up. Those looking for a condominium may find amenities beyond a pool or fitness center such as a concierge that provides room service, maid service, or dry cleaning and laundry care.

Affordability

Before looking for a home, decide how much you want to pay each month. Consider all costs when looking at houses. Not only will you need to pay off the loan, but you will need to pay for insurance. Depending on your area, you may need flood insurance. If you cannot pay 20 percent down, you may need to pay mortgage insurance until you have made enough payments to pay off 20 percent of the loan balance. Figure in homeowner’s association fees, property taxes and any special taxes imposed by the town or county. Do you have a cushion to take care of home repairs?

Next, review your credit files and fix problems. You are allowed one free credit report each year from each of the three major credit reporting agencies, more if you have been denied credit since receiving your free reports. Pay off bills that you find on there, and dispute inaccuracies. They must be removed if they are not confirmed within 30 to 45 days.

Check out city and state housing programs. Some offer down payment assistance, but you may have to use a specific lender.

Then, compare interest rates at different lending institutions and seek pre-approval for a loan.

Get good advice

Choose a good realtor who answers questions to your satisfaction and returns calls or emails quickly. Look for a buyer’s agent with sales experience in homes in your income bracket and with whom you have a good rapport. You don’t want to feel pressured into buying a place you don’t like.

Compare lenders. See who your realtor likes and thinks may be able to cater to your financial situation, but don’t feel bound by their opinion. Ask if the realtor and lender have a business relationship that could affect the realtor’s opinion.

Mortgage types

Know what you are getting into when choosing a mortgage. Fixed-rate mortgages offer a greater level of security because the payment stays the same throughout the life of your loan. Variable interest rate loans adjust after a pre-agreed amount of time such as three, five or seven years. This can give you a smaller payment initially and make it easer to get into a new home, but if market interests rates are significantly higher when the rate changes, you could find yourself required to pay much more each month. If you don’t get the promotion you expect or lose your job, this could be a big problem.

Understand the loan terms like whether you can pay every other week to save money. Find out if you qualify for a low-down payment loan or a special program like those offered to veterans.

Make a decision

After you have prepared, let go and make a decision. You may miss something. Life is full of surprises and the best planning can’t prevent them all.