Your Kids May Be Influencing Your Home Purchase Decision More Than You Think
So many factors go into choosing a home to buy: square footage, location, the number of bedrooms, an open floor plan, the style—the list is endless. But if you’re a parent, it turns out that a big part of the ultimate decision comes down to what your kids think.
According to a recent Harris Poll survey commissioned by SunTrust Mortgage, 55 percent of U.S. homeowners with a child under the age of 18 at the time of home purchase say the opinion of their child was a factor in their home-buying decision. For millennial parents between the ages of 18 and 36, the influence of children is even higher at 74 percent.
And what matters to your kids in a new home might be completely different than what matters to you. Survey results show that children’s top requests for their new pad are: their own bedrooms (57 percent); large backyards (34 percent); proximity to parks/activities (25 percent), schools (24 percent), friends (24 percent); and swimming pools (21 percent).
For renters with children under the age of 18, their offspring will play an even greater role in the decision-making process, with 83 percent of this group responding that the opinion of their children will be a factor in their future home-buying choice.
The survey also revealed that while 72 percent of renters want to purchase a home in the next two years, 17 percent said the prospects of applying for a mortgage are holding them back. SunTrust offers the following suggestions for making the mortgage process less daunting:
Get a handle on your credit. Know what your credit score is and talk to a real estate or mortgage professional to find out if it’s good enough to get you a mortgage. If not, put a plan in place to start improving your credit profile.
Create a realistic budget. When determining the price range of homes you can afford, don’t just think about the monthly mortgage payment—take all the costs of homeownership into consideration, such as insurance, utilities, landscaping, maintenance, repairs, furniture, etc. Then, adjust your mortgage payment as necessary.
Organize your paperwork. Applying for a mortgage requires a lot of documentation, so get a jump on that now. Gather your W-2's, recent pay stubs, tax returns from the past two years, and all of your checking and savings account balances before applying for a loan.
Save for your down payment. Often one of the biggest hurdles for homeowners, put a plan in place for how you will come up with your down payment. Make sure you understand how much will be needed; you don’t always need to put 20 percent down, so talk to a real estate or mortgage professional about your options.
Don’t just look at interest rates. According to SunTrust, interest rates are only part of the equation. Be sure to look at the full picture, including your monthly payment and how closing costs will impact the money you need to bring to closing. One way to compare mortgage options is to look at the Annual Percentage Rate (APR), which factors in the costs of the loan for an apples-to-apples comparison.