5 WAYS TO KNOW WHEN YOU'RE READY TO BUY A HOUSE
We’ve all thought about buying our first house. From, the location to your ideal bedroom-to-bathroom ratio. However, apart from finding the perfect home and dealing with the often complex process of home buying, there are other aspects you should consider before taking the step from potential home buyer to first-time homeowner.
While this is an incredibly exciting time, don’t allow the excitement to cloud your judgement. Buying a house requires sustainability and long-term financial commitment. You should evaluate your financial situation as well as your emotional standpoint to decide if buying a home is the best decision for you at this time.
Below are a few things to consider before making your final decision:
How long do you plan on staying?
Buying a property comes with many costs, such as a deposit, bond costs, attorney fees, insurance premiums and maintenance costs, so it wouldn’t make financial sense for you to buy a house for a short period of time. Ensure that when you decide to buy your dream home, you’re committed to staying in the house for at least 5-7 years, or you won’t see a good financial return.
Are you pre-approved for home finance?
Most of us will need to apply for a home loan to buy the house we want. Obtaining pre-approval through a bond originator such as BetterBond is a great way to gauge financial readiness, as well as what you’ll need to do to get there. To increase your chances of bond approval, you need to show affordability, focus on minimising your expenses to create as much disposable income as possible.
Do you have an emergency fund?
If you’ve managed to save up for a deposit and you’re feeling ready to move forward, take a step back and consider the occurrence of unforeseen circumstances, such as home repairs or maintenance. For this reason, it’s a good idea to be financially prepared by having an emergency fund in place to be able to deal with any repairs as and when required.
Is this the right time?
Timing is everything. When buying a house, there are two elements of timing to consider: what are the current market conditions and how soon can you move. If possible, you want to time the market so that you purchase in a buyer’s market where activity is slow and house price growth is stagnant. When it comes to setting the moving date, if you’re currently renting, you don’t want to be stuck with another nine months on your lease and lose out on the perfect home, but you also don’t want to rush with only a month to find a home. Allow yourself around three months to find a home.
Be realistic & seek advice
One sign that shows you’re ready to become a homeowner is understanding that it’s not always going to be an easy journey. On the bright side, after all the challenges you may face during the process, by the end, you’ll have a home that you can finally call your own. When you finally decide to take the next step, don’t rush into it without considering all the aspects. Prepare yourself by reaching out to a property professional who will be able to guide you through the process.