The Six Most Important Things to Assess in Your Home Purchase

When you are purchasing a home, there are hundreds of things that might go through your mind, from the actual home itself to the financing to the future of your investment. But to help you actually prepare for home buying, you might want to keep a few basic pointers in mind as the most important things to think about. This will not only organize your thoughts, but also the process as you take steps to becoming a homeowner.

What Do You Need?

Buying a home should be something that comes when you feel like you have either outgrown your rental situation or when you begin to see that you need more and can afford more for your living arrangements. So, the first and most important thing you will want to consider is what you need in your new home. This determination will probably vary from person to person, depending on your individual needs, as well as what you consider being something that you need. For example, you might want to make a list that includes things like space, certain location, etc. Think about all of the things that you need, in the order in which you feel they are a priority and then go out and find a home to fit this list.

What Can You Spend?

While you might want to spend a lot of money for a home, you also need to realize that your finances can only stretch so far. Take a moment to sit down and determine where your finances are right now and then decide what you might be able to afford in terms of mortgage payments every month. Of course, you will want to make sure that these payments are realistic so that you're not putting yourself into a situation in which you are overstretching your budget and your capabilities. Some people like to put aside their desired mortgage payment every month to see how it affects their lives. If it doesn't seem to affect them, they are ready to buy a new home.

How is the Location?

When you are looking at a particular home, you need to look at it as a long term investment. And like any investments, you need to make sure it is something that will grow with you over time. Location is one of the most important factors in this investment. In looking at new homes, you should decide whether or not the location is favorable for now and for in the future. The location should have good accessibility to things like transportation and schools, as well as access to shopping and other necessary businesses.

How are the Interest Rates?

While interest rates change, when you are purchasing a home, you need to make sure you are watching them carefully. Since you're probably not going to be paying for your home with a check from your account, you're going to need to borrow money from a bank or other lender. In order to get the best deal on this loan, you will want to make sure that you are getting the best interest rate for your loan and for your credit history. Be sure to look at a number of different lenders in order to be sure of this and talk to lenders about what you want to get in terms of interest rates.

Will the Loan Arrangement Work for Me?

With all of the different loans and mortgage arrangements, you might want to take some time to look at not only how this loan will affect you now, but also in the future. Though a fixed rate mortgage is going to be steady in payments, an adjustable rate mortgage might afford you some reduced payment periods. A 100% financing mortgage might allow you to not have to put any cash down, but a sub prime rate mortgage might be easier for you to get. You need to weigh the benefits and the risks of each mortgage situation in order to choose the one that's right for you.

Am I Ready for the Responsibility?

Though you might feel you are ready for a home investment, you want to be sure that you are going to be able to keep up with the payments, as well as invest the time needed to increase the value of your home over the years. This is not something that can be taken lightly and you need to realize that while a home is a fun thing to own, it's actually something that you need to work at in order to make it a worthwhile investment.

When assessing your future home purchase, you need to recognize that there is more to the process than just the number of rooms or the size of the bathtub - you need to assess your current situation as well as your future in this home.

Grant Eckert