Purchasing a house is one of the biggest choices you will have to make, both in terms of monetary cost and the net impact it will have on your way of life. Looking for the ideal home, often, involves more than going through realty websites and perusing through real estate portals, taking suggestions from other people, reading classified advertisements, visiting display homes on the Gold Coast, and walking around neighborhoods. There are many other concerns that you should consider other than the general look of the home and the surrounding neighborhood. Weighing the considerations mentioned hereafter will ensure that you make the right decision when you feel ready to purchase a home.
1. Monetary Implications of Purchasing the House
The mortgage, in most cases, is always the biggest chunk of the price, but it does not cover the full cost. Inform yourself on all expenses that are associated with purchasing and maintaining a home to ensure that you make an informed choice about what you can and cannot afford.
The most applicable principle is that your taxes, interest charges, principal, and insurance payments should not exceed 30 percent of your income.
Some communities and neighborhoods have established homeowners’ associations. Depending on the type of services offered and the type of property, the homeowners’ association monthly charges could vary considerably.
Before the recent changes in taxation, most mortgage interest charges and property taxes were considered to be tax deductions. However, the government has enacted a number of limits on the types and amounts of deductions. It is, therefore, imperative to consult a tax professional to assess what effect the deductions will have on your financial well-being.
- Basic Home Maintenance
Every house will require some maintenance. Items such as air filters, gutters, and light bulbs might need to be replaced over time. The rule of the thumb is that the yearly cost of maintenance should range between one and three percent of your house’s buying price.
- Appliance Replacements
Home appliances, such as laundry machines, dishwashers, and refrigerators will last for about nine to 15 years. It is, therefore, important to factor in replacement timelines while budgeting.
- Major Repairs
Your new home needs periodic repairs, maintenance, and replacement of structures. Unlike a water heater or a new fridge, which may not cost more than 1000 dollars, a new roof, HVAC system, or windows can cost tens of thousands.
Please do not skip the home inspection. A detailed house inspection, undertaken by an experienced and authorized inspector, will offer more insight into items that need to be repaired. Depending on the scope of the inspection, the inspector can also uncover serious structural damages such as water leakages.
Determining your ideal house size involves balancing between future and present desires. On one hand, it is desirable to budget for an extra room if you wish to have kids in the future, for instance. On the other hand, you may not want to stretch your budgetary allocations for a larger house than you might need.
To balance between these considerations, think in terms of the number of rooms you might require currently. Repurpose the available space as it will be required over time. It might take up to seven years to start building equity. It is, therefore, wise to imagine your life seven years ahead, but you do not need to plan further than that.
Location really does matter. It is likely that you will spend more time in your new home than in any other location. The location of your home and surrounding areas can impact your satisfaction greatly.
Use the following questions as a guide to determine the most ideal location for your house.
- How do the nearby schools perform? Good schools drive a locale’s home prices up. Additionally, it is always a good idea to live in a performing school location, even if you do not have a child at the moment.
- What commutes are available for you and your spouse?
- How does the value of homes in the locale change over time?
- What is the security condition of the neighborhood? Crime rates and police reports can offer significant information about the general security status of a neighborhood. Additionally, you may consider taking a walk around the location or reading local newspapers to learn about the location’s general safety.
- How is the level of noise?
- Is the area prone to flooding?
The more information you have about an area, the better you will be placed to decide if you will thrive in such conditions.
4. House Position
Consider this concern as a specialized form of the location consideration. Your home’s position on the plot of land will play a considerable role in determining your level of happiness while living there.
- Set your house further back from the property line. The further back your home is from the property boundary, the less likely it is that neighbors and passers-by will have a view inside.
- Which rooms in the house will get the most sunlight? Light can impact the total heating, cooling and electricity costs.
- If the home will be located on the highest point of the plot, it is better if the home is well protected against heavy rains. Trees can be a good cover against runoff from rains. Additionally, they can offer insulation and privacy to the house. However, they might become problematic if they grow too close to the home.
5. Student Debt
It is important to check your debt to income ratio. This is because lenders will use this ratio to determine your loan limit. Please keep in mind that even though you are approved to receive a particular loan amount, you should always do your own math to decide how much credit funding will be manageable. You should, alternatively, consult with experienced professionals who can assist you in assessing how ready you are for a mortgage.