Whether you’re looking to get out of the rental market, expanding your family or downsizing, home-buying can be a stressful experience without a proper checklist.
The house-hunting step of this journey can be the most exciting, but don’t get too carried away because there’s much more to buying a house than shown on your favorite HGTV show. To keep organized and sane, use this handy home-buying checklist, including resources and tools from Teachers Credit Union to guide you through the house-hunting process and into the place you will eventually call home.
First, determine your budget
Before heading to your favorite real estate website, prepare yourself and determine your budget. This amount can be estimated by comparing the amount of money you (and others in your household) earn after taxes to your average monthly expenses and debt. Use our free Mortgage Calculator to get an estimate of this number.
Then, get pre-approved for a mortgage
If you haven’t already, it’s smart to get prequalified for a home loan. Without doing this, potential buyers may not even look at an offer. TCU makes it easy to apply for a mortgage online and can issue a Pre-Qualification letter for your convenience. You can then use the Pre-Qualification letter to assure real estate brokers and sellers that you are a qualified buyer.
According to Realtor.com, starting the house-hunting process before getting pre-approved or pre-qualified will indicate to sellers that you aren’t a serious buyer. Full pre-approval can eliminate risk when it comes to making an offer and will speed up the closing time frame. Explore our mortgage FAQs to access details about the pre-approval and pre-qualification process.
Next, decide your ideal monthly mortgage payment
Using both your budget and your estimated loan payment, you have can now hunt for houses by calculating and comparing monthly mortgage payments. Your monthly mortgage will change depending on the type of mortgage you choose and the amount you put down. Use our 15 vs 30 Year Mortgage Comparison Calculator to compare monthly payments on your desired properties to see which term makes most sense for your situation. Sometimes this process can be overwhelming, so don’t hesitate to reach out to a mortgage lender at Teachers Credit Union for help.
Think about what you need in a home
It’s a good idea to balance what you want in a home with what you need. . Think about how long you will be living there. Are you looking for a starter home, a home to pass on to children, a smaller home in preparation for retirement or is this a second home? The answer could have a big impact on your budget, the type of home you consider and the type and length of your mortgage loan term. Our 15 vs. 30 year Mortgage Comparison calculator is a great place to start.
Research local neighborhood home values
You’ve heard it before from countless guides, but for most buyers, location is everything. When it comes to the price of a property, this rings true.
Consider your children and their age, jobs you and your spouse hold, nearby family and amenities. Research the nearest grocery stores, shopping centers and restaurants — anything that fits the lifestyle you would like to maintain or strive for.
School districts also have a major effect on property values . Even if you don’t have school-age children, there are real estate benefits to living in a reputable school district. According to real estate gurus, good school districts preserve home values and faster resale rates.
Once you have narrowed your house hunting down to a neighborhood or two, you are ready to consider the features of the home. This is where the excitement comes in.
Think about your home style and construction preferences
Everyone has preferences when it comes to the style and construction of a house. It’s important to keep an open mind and explore all options, because each style has its own costs. Modern homes with clean lines, simple proportions and an open floor plan will generally come at a higher cost than traditional homes that could use some upgrades and TLC.
Then, decide how many bedrooms you need. If you are a growing family, go for more space than what you’ll use immediately or open your mind to a property with room for expansion. Consider how much outdoor space you’ll need, too. If you have pets, a yard may be a high priority.
Make sure you weigh the costs of a newly renovated home versus a home that needs repairs. New windows, floors and a roof will come at a higher cost than changing the color of the kitchen cabinets or putting a fresh coat of paint on the walls. For some, making a property their own and budgeting for future renovations work better than purchasing new construction. And, if you have a lower monthly mortgage payment, then budgeting for those renovations may improve your financial health in the long run.
Discuss your wants and needs with a licensed real estate agent
If you have followed this home-buying checklist, then your budget, neighborhood, amenities and desired home style should already be laid out so that your real estate agent knows exactly what you need.
Real estate listings are online, on social media and on mobile apps, so you can do the initial search yourself. But know that your agent gets listings before they hit the popular home-buying sites, and that some key information about homes may only be available to agents.
Tour homes with these questions in mind
A good realtor will guide you through the process but consider the history of the property when formulating your questions. Ask as many questions as you can to gather as much information as possible. Consider when the property was built, the materials used, any renovations made and whether licensed professionals made them. Answers to these types of questions could lead to costs you will need to factor into your budget, including immediate fixes and those you can budget for the future. Knowing these answers will help you determine what you can truly afford. Below is a partial list of questions you might consider as you begin our house-hunting experience.
- Is this in your ideal neighborhood?
- What are the nearby schools?
- How close is the property from family or friends?
- How close is the property to work?
- Is the style of the property something you like?
- Are there enough bedrooms?
- Are there enough bathrooms?
- Is the property pet-friendly?
- Does the property have the outdoor space that suits your lifestyle?
- Does the property have the privacy you need?
- What work needs to be done? New roof, new windows?
- Does the property have the heating and cooling that you want (e.g. central air)?
- Are the plumbing and electrical systems up-to-date?
- How energy-efficient is the property?
- Does the property have enough parking or garage space?
- What is the repair history on the property?
- Does the house have the curb appeal you are looking for?
House hunting is both exciting and stressful, but Teachers Credit Union is here to help you every step of the way. Contact us to meet with one of our mortgage loan professionals.
Disclaimer: This article is for educational purposes only and doesn’t constitute tax, legal or accounting advice. Please consult with an attorney or tax professional for guidance.