I am considering buying a single-family home. My fiancé and I have run out of room in our 2-bedroom condo in East Village. While I love where we live – access to the Blue Line, minutes from the Loop, tons of wonderful restaurants, bars, and coffee shops (and donut shops to go along). We are straining to find places to put all our stuff. Honestly, one of the biggest issues is taking the dog in and out 3-4 times a day, given that we live on the 3rd floor.
Can any of you relate to this?
Being a co-founder at a community matching service, Homeology, you would think that the thought of looking for a new place to live would be easy. Well, the challenge isn’t in getting community match done, the Homeology process is quite good. The challenge is PREPARING for the community match.
In order to find the right place to live, you first need to be clear on your requirements, needs, and wants. The first consideration is your monthly budget. We are using this tool to help understand the maximum we want to pay in monthly home expenses: Monthly Budget Tool
With this tool, the output is a “maximum monthly expense”. It is calculated based on a debt to income ratio. In other words, how much do you owe each month versus how much you earn each month. Lenders use this ratio to approve loans and determine rates. Practice is to keep this ratio below 36%, and the lower the better in improving your chance of getting a loan. If you are renting, you can still use this tool. Landlords also look at your credit before letting you sign up for a lease you can’t afford.
An important question to ask yourself now, is do you WANT to spend 36% of your income on a loan or lease, or do you want to use your money for other things. Think about family vacations, pricey (though fulfilling) hobbies, or saving to retire early. In our case, we are considering all of these things, so we set our ratio to 30% to come up with our housing monthly expense budget.
Next, you should consider your priorities and understand trade-offs. We all want to live in an affordable – safe neighborhood, which is quiet and green, has plenty of yard space, has lots of local amenities, and is only 30 minutes from work. That would be a popular place, right?! The reality is that it is very hard to get everything you want, so you need to identify where you will compromise and where you will not. For me, commute is the big non-negotiable. In my younger years, I spent several hours everyday commuting from Lakeview to Lisle. Never again!
I also must have social and economic diversity. Lastly, I need to be near an area where I can walk and run, and I don’t want to have to drive there. This is so important to my well-being and is something that I must have.
For you, think about what is really important to you and your family. I stress that you need to let go of social pressures. This decision should not about what other people think. It should only be about what makes you happy. Rarely does a house alone make people happy. Visualize yourself walking in your neighborhood – think about how you want to interact with neighbors and what you want to see.
Write down what is really important to you and share this with the whole family. It is important to discuss what makes everyone happy. Have them add to the list, then vote on the most important factors. Even if you clearly know what is most important to the whole family, it does not mean that you can have everything. So also take the time to weigh the factors. The truth is that nothing is really equal. Work hard to determine the rank of your factors.
You are armed with a budget and your prioritized family requirements, needs, and wants. Now you can start your community search! And if you need a little help in finding the ideal place to live, please visit Homeology.