Before you begin looking for a home or even speaking with a lender, the first thing you need to do is identify your Lifestyle and Financial Goals.  These goals include both short term (within the next 5 years) and long term (after 5 years).

There are a number of factors that can positively or negatively impact your life both in the near and long term future.  In addition, most people’s financial situations change as their lives change.  Consequently, when it comes to real estate usually lifestyle and financial goals go hand-in-hand.  In many cases, you may need some guidance in defining these goals so that you have a clear picture of what you are trying to accomplish before you make a large monetary commitment towards buying a house.

Lifestyle Goals
Lifestyle Goals are those goals that must be met in order to support the lifestyle that you have either become accustomed to or that you desire.  Some samples of lifestyle goals are:

• short commute to work
• room to grow the family
• backyard for dogs
• room to have that music studio for your band
• ability to explore hobbies comfortably without interrupting daily life
• capacity to easily entertain

It is important that you consider these goals both in the short term and the long term.  Many people buy homes that fit them for today, but quickly aren’t able to easily adapt to their changing lifestyle.  Projecting what your life will be in the future will help you make a smarter purchase today.

Financial Goals
Most people think in terms of “Can I afford my monthly payments?” when buying their new home.  Most people don’t realize that purchasing a home is actually the largest single investment they will ever make in their lives.  If you were to receive $250,000 and told to invest in the stock market, you would most likely not invest the money based on your “feelings” about the stocks, but instead take an analytical approach to determining which investment will get you the greatest return based on a projected period of time. 

But when people buy homes, often they don’t think how this investment will perform for them over the long term.  For example:
Will

• this property be easy to sell in 5 years when I want to move?  
• Will I be able to rent this property to add to my retirement portfolio?
• What kind of return can I expect in 5, 10, 15 years?

Understanding the short and long term economic implications of your purchase can go a long way towards providing for your future financial security.

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