A home is the biggest purchase you’re ever likely to make in your lifetime, so it’s a huge decision.
It’s not just the monetary commitment you need to consider; it’s crucial to think about the responsibilities that come with being a homeowner too.
Is this something you’re really ready for?
Here are five questions to ask yourself.
Are You Ready to Settle Down?
Purchasing a house is a long-term commitment and does essentially tie you to one location for many years. Before you sign on the dotted line, ask yourself if you’re ready to settle down. If you have grand plans of traveling the world first or working abroad for a few years, then it might be sensible to do these things first.
How certain are you about the area you want to live in? Are you sure that this is where you plan on staying, or in a few different places first so you can be certain? How about things like schools and places for children?
Even if you’re not planning on starting a family right now, if you want to eventually, then this could be the house that you raise your children in. You will want to think about work, too, is the house in a location that will make sense for your future career plans- could you commute to nearby cities easily or work from home if needed? It’s important to consider your long-term plans,
Can You Afford it?
Many people are so desperate to purchase a property that they end up buying something that they can’t actually afford. While a mortgage provider will only lend you what you can typically cover based on your income, there are many other factors that determine how much you can comfortably afford.
You need to factor in the cost of bills, any existing debts you have, childcare costs, car payments, the cost of food, and other things like luxuries that you wouldn’t want to live without. You should also allow space in your budget to be able to save some money each month for emergencies, home repairs, and other costs.
Insurances are another important cost to cover when you’re a homeowner; various insurances include life, buildings, and contents cover. Make sure you know , and plan for emergencies too. Having a buffer of at least a few months’ rent and bills saved is something to aim for. As the covid pandemic has shown us, you never quite know what’s around the corner.
Have You Saved Enough for a Deposit?
To put down a deposit on a home purchase, you will need 10 to 20 percent of the property’s value. Find out how much your mortgage provider requires ahead of time, and be sure that you have enough saved.
On top of this, you’ll need to have money for legal fees, moving costs, and other expenses, so save hard!
Are Your Finances in Order?
To secure a mortgage, your finances need to be in excellent order. This might mean spending a number of years building and improving your credit score, ensuring that you’re using any credit carefully and not missing any payments.
It’s crucial to get hold of your credit report so you can keep track of everything since a simple mistake can mean you’re no longer eligible for a mortgage. Generally, keeping your money and finances in good order is how you’ll achieve this.
All bills should be paid in a timely manner, and you shouldn’t be taking out new credit or spending more than you can afford, or you risk messing up your mortgage application.
Have You had All of Your Fun?
Being a homeowner is a huge achievement, but it’s a lot of responsibility. In the early years, at least, you will probably find that your spare money goes towards home improvements and other home expenses rather than the likes of vacations and extravagant purchases for a while. Is this something you’re ready for?