Are you looking to find a new home in the sunny city of Phoenix, Arizona? With so many attractions and fun activities, it can be a great place to settle down and raise a family. Of course, with many locations, it can be difficult to find the right property for you and your family–especially in the current real estate market. If your goal is to get your dream home, then it could be a good idea to look under your budget for a house that you can renovate and into the kind of home you want. Here are some tips for the process.
Securing a Home Loan
Securing a solid home loan or mortgage from a quality lender is the most important step in the home-buying process. You should know exactly how much money you have to work with before you even begin looking at potential homes. To ensure that you get a loan that will work best for you, be sure to compare the benefits and restrictions of different loan types. A few examples of loans include:
- FHA Loans: These loans are issued by the Federal Housing Administration and are intended to aid those with limited income in buying their first home.
- VA Loans: These loans are issued by the Department of Veterans Affairs to active duty military members, veterans, and surviving spouses.
- Conventional Mortgages: These loans include any that are not sponsored by a government entity and are the most common type of home loan used by buyers.
- Jumbo Mortgages: These loans are just any conventional mortgages that exceed the limit set by Fannie Mae and Freddie Mac, which are two federally regulated real estate organizations. Currently, this limit is around $726,00 in most markets.
In some cases, the type of loan you use will affect your eligibility for different properties, so you must do your research.
Finding the Right Home
Just like with your loan, you should do plenty of research to find the right home. If you are planning to make renovations to customize the home and make it how you want, then the look of the home itself isn’t necessarily as important as other factors like:
Make sure you find a home that is central to the things that you care about–your job, good schools for your kids, and amenities like grocery stores and public transport. You should also research the neighborhoods you are looking at to ensure that they are a good investment. Look at details like crime rates and average property value. These factors could not only affect your living experience but the value of your home if you were ever to sell it.
To ensure that you have enough freedom in your budget to make all of the renovations you want to do, you need to find a home that is well below the amount that your loan was approved for. When looking at homes, you should pay attention to things that stand out as needing to be renovated, making a list of costs to total up at the end. To do this, you need to understand average renovation costs. On average, bathroom renovations cost about $11,000 and kitchen renovations are around $26,000.
To save on other large expenses, have an inspector walk through homes with you to look for signs of cracks and leaks. These can be signs of issues with the foundation or roof and could end up costing as much as, if not more than, a kitchen renovation. Keep in mind, too, that shifting around the layout of a home can get expensive and is not always entirely possible if you have load-bearing walls, so look for a home with a layout that you like. This way, you can save that money for other projects that you care more about.
Budget and Prioritize
Before starting renovations on your new home, you should have a solid understanding of your budget and repair costs. Make a list of every project that you want to be done in your new home, organizing this list of items based on priority. The unfortunate truth is that new problems–ones that are not so easily ignored, threatening the integrity of your home–are often discovered during big renovations. When this happens, you might have to cut something from your list of projects to be able to cover the costs. With your pre-made list of priorities, deciding which projects to hold off on is made easier. You can work your way from the bottom up any time a new expense arises, ensuring that the most important projects can still be covered.