5 Things to Consider Before Purchasing a New Home

Whether you’re looking to buy for the first time or think it’s time to move on from your starter home, there are a lot of things to take into consideration before you purchase a new home.

The upside to homeownership is it’s yours. You can do whatever you want and make whatever changes appeal to you. The downside is…it’s yours. So if something goes wrong, there is no landlord to call.

So before you purchase a house, here are five things to consider.


The first aspect to consider is the location. There is more at stake than finding a home in the right neighborhood or the best school zone for your little ones. Where you purchase that new home could have a tremendous impact on your budget as well due to increased commuting costs, should your choice of a home be farther from your place of employment.

Figuring commuting costs may be one of the initial steps you take in determining where you want to begin your home search.


Another critical part of home buying is to take careful stock of your financial situation, create a budget, and make sure you stick to it. Experts recommend carrying a debt load, including a mortgage, that is no more than thirty-six to forty percent of your monthly income. 

Getting pre-approved with a lender will give you an idea of your home price range based on that debt-to-income ratio. While it might be tempting to begin your home shopping at the top of that price range, it’s better to start at the bottom.

That way, if you discover there are some non-negotiables in your shopping, such as a garage or a bonus room, you still have room in your budget to move up. Don’t forget the costs involved in the transition from your existing home or apartment to a new home. There might be overlapping rent or mortgage payments or the need for temporary housing until you finalize your move.

Type of Mortgage

A home is likely to be the largest purchase you will ever make. For most buyers, it is a long term purchase. However, a traditional thirty-year mortgage might not be your best option. While the thirty-year, fixed-rate mortgage is the most common, it is by no means the only option. Forty-year options are out there for people looking for a lower monthly payment.

 If your goal is to pay the least total amount of money for your home,  a fifteen or twenty-year mortgage would be the way to go. The shorter term would have higher monthly payments but a lower overall price due to a decreased amount of interest. Whichever option fits your needs, you must have a down payment. The standard down payment is twenty percent. 

Lenders are more lenient with down payments for a house where you are the primary resident living there full time.. So it is possible to purchase a home with less money down. Expect most lenders to insist on mortgage insurance to cover their increased risk.

New Construction or Existing Home

The next thing to consider as you begin your search for a home is whether you’re shopping for new construction or an existing home. It’s essential to keep in mind when buying an older home that renovation costs may be part of your overall budget. Older homes may come with problems that need to be fixed or updated. Buying a house, you will need to flip not only means additional financial resources for renovation, but also time and sweat if you’re going to handle some or most of that updating.


Finally, whether your home is new or newly renovated, you will want to protect that investment. A homeowner’s insurance policy is standard but not the only option available to you. Adding home protection plans to your purchase could give you additional peace of mind. They are not designed to take care of every home repair. Still, they are available to help when appliances or significant home systems such as heating and air conditioning need repair or replacement. Also, it is a good idea to create an emergency maintenance fund you can tap for those repairs not covered by a home warranty.,


According to REcolorado, the average price for homes sold in March was $588,000. With that type of investment at stake, it pays to do your homework. Do the research upfront to make sure you make the purchase a thoughtful one, so your dream home doesn’t become a nightmare.

Originally posted October 2019. Updated April 2021