Thereâ€™s no denying mortgage rates are higher now than they were last year. And if youâ€™re thinking about buying a home, this may be top of mind for you. Thatâ€™s because those higher rates impact how much it costs to borrow money for your home loan. As you set out to make a purchase this winter, youâ€™ll need to be strategic so you can find a home that meets your needs and budget.
Danielle Hale, Chief Economist at realtor.com, explains:
â€œThe key to making a good decision in this challenging housing market is to be laser focused on what you need now and in the years ahead, . . . Another key point is to avoid stretching your budget, as tempting as it may be given the diminished purchasing power.â€
In other words, itâ€™s important to be mindful of whatâ€™s a necessity and whatâ€™s a nice-to-have when searching for a home. And the best way to understand this is to put together a list of desired features for your home search.
The first step? Get pre-approved for a mortgage. Pre-approval helps you better understand what you can borrow for your home loan, and that plays an important role in how youâ€™ll craft your list. After all, you donâ€™t want to fall in love with a home thatâ€™s out of reach. Once you have a good grasp of your budget, you can begin to list (and prioritize) all the features of a home you would like.
Hereâ€™s a great way to think about them before you begin:
Must-Haves â€“ If a house doesnâ€™t have these features, it wonâ€™t work for you and your lifestyle (examples: distance from work or loved ones, number of bedrooms/bathrooms, etc.).
Nice-To-Haves â€“ These are features that youâ€™d love to have but can live without. Nice-To-Haves arenâ€™t dealbreakers, but if you find a home that hits all the must-haves and some of the these, itâ€™s a contender (examples: a second home office, a garage, etc.).
Dream State â€“ This is where you can really think big. Again, these arenâ€™t features youâ€™ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, itâ€™s a clear winner (examples: farmhouse sink, multiple walk-in closets, etc.).
Finally, once youâ€™ve created your list and categorized it in a way that works for you, discuss it with your real estate advisor. Theyâ€™ll be able to help you refine the list further, coach you through the best way to stick to it, and find a home in your area that meets your needs.
Putting together your list of necessary features for your next home might seem like a small task, but itâ€™s a crucial first step on your homebuying journey today. If youâ€™re ready to find a home that fits your needs, letâ€™s connect.