Living in the Windy City: 5 Tips for Buying a Home in Chicago

Are you interested in purchasing a home in the suburbs of the Windy City? Do you find yourself perplexed at all of the options that are in front of you? If so, then you need to learn all that you can about buying a home in Chicago.

Doing so can help you find your dream home. you can find one that perfectly ties in with your annual income, as well as prepares you for your growing family, and so forth.

See below for an in-depth guide on how to buy a home in Chicago and all of the tips you can use to find the right fit.

1. Establish a Budget

Perhaps you are tired of landlords increasing the cost of rent in every rental property that you move into. Maybe you want to find something more permanent for you and your family. Whatever the case might be, it’s always smart to start by creating a home buying budget.

First, start by adding up your annual gross income is. Generally speaking, you don’t want your mortgage to cost any higher than 28-percent of your total gross income. This helps create a sustainable balance for other monthly payments, cost of living, and room for the rest of your spending. This is what experts refer to as the “28-percent rule”. 

For example, let’s say your annual gross income is $100,000. Multiply that by 0.28 (representing the “28-percent rule”) and the total would be $28,000. Divide that by 12 (months in a year) and you’ll come out to $2,333. 

The goal is to find a house that can help you stay at $2,333 or (ideally) less. You should pay attention to the average costs and payments for Chicago residents.

The average median home cost in Chicago is around $257,000, while the median monthly home mortgage payment is around $1,800. This will help you understand what end of the spectrum your budget falls into. 

2. Find the Right Neighborhood for Your Family

A new home won’t do you any good if you’re afraid to venture outside of it. It’s all about setting yourself up in a Chicago community that you and your family will thrive in.

As most people know, Chicago has some great neighborhoods as well as some that you’ll want to stay away from. It’s all about educating yourself on the neighborhoods that are within your price range and what you feel comfortable with. 

For all of you with growing families, you’ll want to be sure and look for things like good school systems, safe areas, local amenities, local parks, whether the house has space for your family to grow, and so forth.

Make sure that you’re aware of the best suburbs in the Chicago area. Some of the most top-rated suburbs to live in Chicago are:

  • Naperville
  • Lombard
  • Western Springs
  • Buffalo Grove
  • Clarendon Hills
  • Hinsdale
  • South Barrington
  • Oak Park
  • Evanston

Keep in mind, these are just a few of the great suburbs that Chicago has to offer. Find one that works within the budget you’ve set for yourself, then find houses that fit within your parameters.

3. Create a Non-Negotiable List

Finding a new house is one of the most exciting, overwhelming, and daunting processes that you’ll ever experience. It’s easy to get caught up in the amenities that one home has over the other, as well as feeling the urgency to buy something quick.

With those things in play, it can be easy to make a rash decision. That’s why it’s always nice to have a bit of accountability along the way. 

We recommend making a non-negotiable list. This is a list of features that you are unwilling to bend on. In other words; if a property doesn’t have one of the things on your list, you aren’t making an offer on it.

The non-negotiable list can have anything you want on it. However, keep in mind that while it can help you filter down options, the more items you put on the list, the longer it will extend your search.

For those of you looking to purchase a fixer-upper, be sure to browse for a property for sale near me.

4. Think Fast, Offer Faster

You aren’t the only one that wants to purchase a home in Chicago. It’s the crown jewel of the midwest, and many people are looking to move within the city limits if they find the right house.

If you find a house that checks all of the boxes of your non-negotiable list, then don’t wait too long to make an offer. The Chicago real estate market is as competitive as it gets.

Don’t worry about making a rash decision; as long as you follow the budget and non-negotiable list that you’ve taken time to think through, you’ll be good!

5. Consider Your Ideal Mortage Length

Most people believe that a 30-year home loan is their only option, but that couldn’t be further from the truth. 

It’s wise to consider both a 30-year mortgage and a 15-year mortgage; both have their advantages depending on your situation. 

A 15-year mortgage will give you a lower interest rate, but a higher monthly payment due to the aggressive payment of the loan; a 30-year mortgage has the reverse effect: higher interest rate, lower monthly payments.

Buying a Home in Chicago: Learn All of Your Options

Now that you have seen an in-depth guide on buying a home in Chicago, be sure to use all of this information to your advantage.

Take the time to browse our website for more articles on Chicago home buying tips, as well as many other topics that you might find interesting.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.