Real Estate: Tips for choosing a home you can afford

By Carrie Colby 

It may take a while for you to save for a down payment, lower your debt to income ratio or improve your credit scores. But if you work hard and stick with it over time, you may begin to see some rewards, like easier loan approval and better loan terms.

In the meantime, here are some things to consider as you think about what home you’d like once your finances are ready.

Set a budget

To figure out how much you can afford, consider getting preapproved for a mortgage. But when you do, remember that the lender is making a mostly mathematical calculation and not taking into account your comfort level or preferences. Make sure you’re comfortable with the amount you plan to borrow, even if the lender says you can borrow more.

Your mortgage payment isn’t the only expense you’re responsible for. Don’t forget to budget for real estate taxes, homeowner insurance and if there are homeowner association fees.

Narrow down location and neighborhood

Before you begin looking for a home, take some time to think about the type of environment you want to live in — city, suburbs or rural.

Next, narrow your search to a few neighborhoods. Here are some things to consider:

Safety — Some websites offer crime statistics by area. If you’re especially concerned about crime,
check with the local police department.

School district — Houses in good school districts typically have higher property values. Look up ratings of schools in the area. But don’t rely on ratings alone. Check out online reviews or talk to parents who send their children to local schools.

Activities — Find out whether there’s a park nearby. Can you get to hiking trails quickly? What about playgrounds, beaches or playing fields?

Convenience — Do a test run of your morning commute and check the drive time to the local grocery store. Time spent driving to the store adds up and will affect how you spend your time when you move into your new home.

Type of home and other considerations

You’ve got the location and neighborhoods. But what type of home do you want — single-family, townhouse or condo. Here are some other considerations:

Condition — Move-in ready or fixer-upper? Consider how much you’re spending, whether you’re
handy or hate the sight of a screwdriver, and how long you’re willing to wait to move in.

Resale — If you’re planning to stay in your home for a shorter time period, resale value will be more important than if you’re planning to stay long term.

Other features — Central air conditioning, swimming pool, garage, granite countertops, hardwood floors, walk-in closets. Have some fun figuring out what you can and can’t live without — and how much it will cost you. Can't find what you're looking for in your price range? 

A good real estate agent can help you determine whether your wish list is realistic.

Carrie Colby is a Broker with Allied Real Estate, 909 Roosevelt Trail in Windham. She can be reached at 207-232-5497. <