When you’re shopping for a new home, of course, one of your biggest concerns will be the price. After all, the total price plays a big role in how much you’ll pay from month to month. However, something to keep in mind while you're looking at all those numbers is: you can’t always compare two different homes on price alone. Consider these other factors as you choose your new place.
The quality of the materials used in a home go a long way toward making you a happy owner and reducing the amount of money spent on repairs. Though new homes are often more expensive than homes that have been around for decades, you buy a new home knowing that you won’t have to make repairs for many years.
It’s all too common to purchase an older home only to have to repair the electrical system or buy new appliances after a short time. Even if you are only looking at new homes, quality plays a role. Some builders will use cheap products to get the same look as homes with more expensive materials, and for that reason, problems will arise sooner.
Prime locations often mean the home will be more expensive. In some cases, the higher cost might put the home out of your price range. Sometimes, though, you have to consider all of the costs that will go into your budget to see if a lower price really means a better deal. For instance, if you choose a home in a neighbourhood further away from where you work, you will have a longer commute, burn more gas, and you will spend more time commuting. This may offset the money you saved by purchasing a cheaper home over time.
The same is true if you buy a cheaper home in an area without good schools, shopping, medical and entertainment amenities – the cost of commuting, or just plain going without, is often steeper than the difference in cost between homes. Play around with an online mortgage calculator to get a better idea of what different homes will cost you on a monthly basis.
For example, a $400,000 single family home with a variable interest rate of 3% and an amortization period of 25 years means you can expect a mortgage payment of $1892.98 monthly. A larger home priced at $430,000 with the same interest rate and amortization period, will only cost you $2034.96 a month. This means for a mere $141.98 extra a month, you could look forward to upgraded features such as quartz countertops or more usable space (like a finished basement) for you and your family to enjoy.
A less-expensive home might not have the type of layout you really want for your family. For instance, if you have young children, you might prefer a home that has all of the bedrooms on the same floor rather than one with a master suite on the first floor. As you compare homes, think about whether a home that has a less-than-ideal layout is worth the savings you get. You might be excited about buying a new home and think that you can put up with it, but over time it may become more and more inconvenient.
Dream Home vs. Settling
The sad reality is that when you’re comparing houses by price alone, you’re often thinking about settling for something that’s cheaper rather than trying to get a home that’s truly your dream home. A better plan is to look for ways you can make your dream home more affordable.
For instance, by spending an additional two years saving up for a down payment, you could significantly reduce your monthly costs. Alternatively, you might find that it’s smarter to start with buying a smaller home, like a condo, that will allow you to build up equity as you save up for what you really want. In an appreciating market, getting into a newer home sooner can also give you equity that you can then use towards your dream home.
There are many factors to consider when it comes to comparing homes, and no two homes are exactly alike. As you evaluate your choices, you need to think about what you’re getting at different price points, what features you really want in a home, and what sacrifices you’re willing to make for affordability. You ultimately want to end up in a home that meets your needs, compliments your lifestyle and that you can live comfortably in for the long-term.
If you're thinking about buying a new home, we encourage you to come and visit one of our many showhomes and speak to an area manager. They can answer any questions you have and can connect you to one of our preferred lenders who can go through financing options with you. Download our handy showhome map to make it easy to find our showhomes in the communities we build in.