When You’re Ready to Start Your New Home Shopping Spree…
When You’re Ready to Start Your New Home Shopping Spree…
You may envision glittering granite counters, a sunroom with French doors opening to a terrace, or a pristine master bath with heated flooring. While these choices are exciting, they can also bring uncertainty. Let’s guide you through selecting the right neighborhood, community, builder, and home that fits your lifestyle and needs.
What Do You Want in a New Home?
Start by defining your lifestyle and how your home can reflect it. Before exploring local markets or builders, prioritize your must-have features, nice-to-have elements, and what you can live without. Consider:
- Long-term goals: Financial advisors recommend staying in a home for 5–7 years to recoup costs. Is this your “forever home”?
- Family changes: Plan for aging parents, growing children, or future needs like a first-floor master bedroom.
To clarify priorities, ask yourself:
- How long have you been looking?
- What do you love/hate about your current home?
- What’s your ideal monthly payment vs. total budget?
Figure Out How Much You Can Spend
Create a realistic budget before touring homes. Steps to determine affordability:
- Check your credit: Request free reports from annualcreditreport.com and dispute errors.
- Calculate equity: If selling a current home, estimate proceeds after commissions (6–10%) and mortgage payoff.
- Factor in gifts/savings: Clarify gift amounts from family and combine with savings for a down payment.
- Estimate monthly payments: Use mortgage calculators to test loan amounts, rates, and terms. Include mortgage insurance if down payment < 20%.
Key Tip: Aim for housing costs ≤30% of gross income. A $275k loan at 5% equals $1,468/month. Even a $10k higher loan adds just $53/month.
Bring in the Professionals
Build a team to simplify the process:
- Lenders: Compare builder-affiliated lenders (for incentives) vs. independent options. Ensure they understand new-home financing timelines.
- Realtors: Optional if you’re confident, but helpful for navigating contracts and negotiations.
Why Work With a Builder’s Recommended Lender?
- Access to closing cost assistance or upgrades.
- Faster approvals and familiarity with the community.
- Reduced risk of delays, as lenders are incentivized to close smoothly.
Always compare rates/fees with 2–3 lenders to ensure competitiveness.
Final Tips for Success
- Lock rates early: Construction delays can impact rates. Ask lenders, “How would a 1% rate increase affect my payment?”
- Prioritize needs: Balance daily comfort (e.g., kitchen layout) with long-term flexibility (e.g., adaptable spaces).
