Mortgage rates are higher now than they were last year. If you are going to take out a loan to fund your home purchase, your rate will impact how much house you can afford. When searching for a new home, you need to be strategic so that you can find a home that fits both your needs and your budget. Before you start looking at homes, it’s best to prepare.

First, get pre-approved for a mortgage. This step is crucial. Once you are pre-approved, you will understand the home price that you can afford and that you are comfortable with. If you start looking at homes before you know what you can afford, you might fall in love with houses that are out of your price range. That might make it more difficult to be excited about houses that you can afford.

Once you are pre-approved and have a good grasp of your budget, you can begin to prioritize your new home’s features. You may want to create a list with three categories.

• Must-Haves - These are features that you can’t live without. For example, maybe you must have a two bedroom house that is at least 15 minutes from your work.

• Nice-To-Haves - These would be features that would be great, but you could live without. If you found a home that was missing a few of these features, it wouldn’t be a dealbreaker.

• Dream Features - This is where you can fantasize a bit. Is there anything that you’d really enjoy but isn’t necessary at all. 

Once you have created your list, discuss it with your Realtor. They’ll be able to help find a home in your area that meets your needs.