Mortgage rates are undoubtedly higher now than they were a year ago. And if you're considering purchasing a home, this might be on your mind right now. This is because the cost of borrowing money for your home loan is impacted by these higher rates. You must be strategic as you search for a home this winter so that it will meet your needs and budget range.

Danielle Hale, Chief Economist at realtor.com, explains:

“The key to making a good decision in this challenging housing market is to be laser focused on what you need now and in the years ahead, . . . Another key point is to avoid stretching your budget, as tempting as it may be given the diminished purchasing power.”

In other words, when looking for a home, it's important to consider what features are essential and which are only good to have. And the best way to understand this is to create a list of desired features for your property search.

The first step? Get a mortgage pre-approval. Pre-approval gives you a better idea of how much money you can get for a home loan, and it has a big impact on how you'll make your list. You don't want to fall in love with a house that is out of your price range, after all. You may start making a list of (and prioritizing) all the features of a home you want once you have a good grasp of your budget.

Here’s a great way to think about them before you begin:

• Must-Haves – If a house doesn’t have these features, it won’t work for you and your lifestyle (examples: distance from work or loved ones, number of bedrooms/bathrooms, etc.).

• Nice-To-Haves – These are features that you’d love to have but can live without. Nice-To-Haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of these, it’s a contender (examples: a second home office, a garage, etc.).

• Dream State – This is where you can really think big. Again, these don’t feature you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner (examples: farmhouse sink, multiple walk-in closets, etc.).

After you've made your list and organized it in a way that suits you, talk to your real estate expert about it. They may assist you in further polishing the list, offer advice on how to best stay on it, and locate a house in your neighborhood that satisfies your requirements.

Bottom Line

Putting together a list of important characteristics for your next house may appear to be a small effort, but it is a critical first step in your homebuying journey today. Let's talk if you're ready to find a home that fits your needs.