February 8, 2011
When it’s time to start thinking about buying a home with an FHA mortgage, first-time home buyers often need to learn a few things about the nature of the housing market. One of the most important lessons a new house hunter learns is that not all properties are created equal, and even those that do seem similar have unique issues that may affect the price and availability of the property.
The housing market is an ever-changing thing. Whether you apply for a conventional or FHA insured mortgage loan, much depends on the place where you’re conducting the search for a suitable home. The property that costs $75,000 in one market may be worth a quarter of a million dollars in another. But location aside, there are some predictable factors that affect the price of a given property.
Those on the hunt for a home can save themselves quite a bit of time by deciding in advance on a few features they’d like their new home to have. Square footage is one concern–how large do you want or need your home to be? For those new to thinking of a home in terms of square feet, it’s difficult at first to picture in your head what 2,000 square feet might look like, but once a buyer has seen a few homes knowing their square footage, that process gets easier.
The number of bedrooms is another factor in buying a home with an FHA loan. You may only need one or two bedrooms at present, but think ahead. Do you anticipate needing more space for a new family member or a home office for a small business concern? More bedrooms may mean adjusting the amount you need for the loan application.
Sometimes the price of a home may be higher or lower for reasons that don’t seem obvious at first. Have you found a comparable home in another neighborhood that was more expensive? Take a closer look at the features of the property to see if you can find clues as to the pricing. For example, a larger back yard could bring the property value up on one home with the same number of bedrooms as a house with a smaller yard. A house may be less expensive if it’s located near a busy roadway, an airport or other high-traffic zones.
Another factor that could influence a purchasing decision is the proximity to local schools and other important community centers. That may or may not affect the price per se, but it could affect your willingness to pay the asking price for a home in an advantageous location.
Buying a home with an FHA loan is more than just negotiating the asking price and getting the FHA to insure your loan; it’s also about your lifestyle, which is why FHA counselors recommend plenty of early preparation and research before committing to closing the deal.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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