Whether you're a first-time buyer or a seasoned homeowner, purchasing a house is a huge undertaking. That's why it's important to know what factors to take into account before you get serious about buying a particular property. To help make your future homebuying endeavors go more smoothly, we asked a handful of real estate experts what questions you should ask yourself prior to purchasing a home, and this is what they had to say.
1. "Why do I want to become a homeowner?"
If you're only interested in buying a property to keep up with Joneses, broker Michael J. Franco of Compass says you might want to reevaluate your reasoning. "A house is an asset that you can actually use and enjoy," he explains. "Some people buy real estate thinking they are going to get rich from it but the more important factor is wanting a great place to live and establishing long-term equity."
2. "What can I afford?"
Before you begin the process of buying a home, it's crucial that you determine how much you can afford as a down payment, as well as determining what monthly mortgage payment is reasonable for your budget. "The down payment for your home is a direct correlation to the maximum loan percentage a lender will loan you," says Ed Kaminsky, a realtor at Strand Hill. "Your monthly payment will be based on your current interest rates, but a general rule of thumb is about one-third of your gross monthly income."
3. "Do I have any debt that I can pay off?"
If you have any outstanding debts, such as credit cards or car payments, Kaminsky recommends paying off what you can to improve your borrowing power on a potential home. "It sometimes makes sense to pay off a $10,000 credit card balance to be able to qualify for the right home," he explains.
4. "How much savings will I have after I pay the down payment?"
If the down payment on a house is going to deplete your savings funds, Kaminsky says to think twice about purchasing a property. "The amount of savings you have after you pay your down payment is called 'reserves'," he explains. "It is a good idea to have 12 months of reserves to cover your mortgage after your down payment."
5. "What attracts me to this property?"
"Buying a home is a big commitment and an even bigger investment, which is why Franco says you need to ensure that the property offers everything you are looking for. "You don't want to rush into buying a house for the wrong reasons," he says. "Ask yourself: 'How will I feel coming home to this property every day' so you can make the right decision about a house."
6. "How do I assess what repairs may be needed?"
In order to finance and plan for renovations, broker Susan Abrams of Warburg Realty says it's important to know what repairs a house needs prior to purchasing. "A buyer should ask a contractor and/or inspector to walk through the property to determine what repairs may be needed, the cost of any repairs, and that the property is in full compliance with any building codes," she says. "Also, be sure to check all major appliances and HVAC systems to make sure they are in working order, and if not, be sure to obtain an understanding of the cost to replace them."
7. "Will this home still work for me if things change?"
Since we can't predict the future, Kaminsky says it's imperative to make sure a home will still meet your needs in the event that your life changes drastically. "If your family size changes, you want to make sure the home offers enough space to accommodate," he explains. "If you lose your job, you'll want to be sure you can still afford house payments, and if an incurable virus shows up in the world, you want to be certain that you can work from home, teach your kids from home, and so on."
8. "Can I trust my agent?"
The right real estate agent can make or break your homebuying experience, which is why Kaminsky says it's essential to find an agent you can trust. "Your agent should be able to provide you with an honest assessment of the value of a home, as well as the pros and cons of its size, location, and condition," he says.