Dreaming about your first home is exciting, from conjuring up each room in your dream home and each event that you will host in your new pad. But before you get ahead of yourself consider whether you, and whoever you are purchasing with, are ready to take this step.
There are many things that will contribute to being ready and this post will prompt important questions and things to consider.
1. Should I buy instead of rent?
To buy or to rent? This can be a tricky decision to make. While the idea of paying substantial funds to the bank for many years may be daunting, there can also be quite a few advantages.
Purchasing a home is an investment. Given how things have been moving in our current property market, in the future you will most likely sell your home for more than you purchased it for, thus making a return on your initial investment. Versus you will not make a return on the money you are paying in rent.
Another benefit to consider is the control and agency you will have when you own a home. Say goodbye to your landlord’s rules. Do you want a pet? Go for it! Looking to repaint or redecorate? Have at it.
There are both pros and cons to renting or buying. But our advice to you would be if you are able to purchase- do it. Making this decision could be a significant investment for you and your family’s future.
2. Are my finances in the right place?
One of the best places to start when asking yourself if you are ready to purchase a home, is looking at your finances and money.
If you have:
- At least a 10% deposit;
- Minimal outstanding debt (not including student loans);
- A good income;
- The amount you are paying in rent and the amount you are saving towards your future home totals more than what your mortgage repayment would be-
– then you are off to a great start!
If you don’t have this in place just yet, it might be time to look at implementing a budget. If you need guidance on how to get you and your family into the right financial position get in touch with one of our advisers
3. Do I have the time right now?
While hiring a great mortgage advisor will take a lot of the time out of organising a home loan, there is still a time commitment associated with this decision. For example, your advisor will require documents that state your current financial position. These could be 3-6 months of bank statements, a list of your assets, confirmation of your income, information about you and your family etc. Getting this information together can take some time and may require you to set aside a couple nights to compile the necessary documentation.
After you have been approved for a home loan, you will the need to begin your house hunt. We probably don’t need to tell you how competitive the housing market is at the moment, and because of this you will need to have time and resilience when finding and then bidding for your dream home
4. Am I willing to sacrifice?
There is a chance you will have to make some sacrifices along this journey. This could be financially, this could be in your time and energy, but this could also mean making sacrifices as to the kind of home you are dreaming of.
As discussed earlier, the housing market is extremely competitive which means there is a good chance that your absolute dream home is out of budget or gets snapped up quickly. You need to consider that your first home, may not be the dream home. But don’t fret, this is just your first and your dream house will be on future horizons.
In the meantime, write down a list of your non-negotiables in a home and start searching for your property based on this. Your first property may not have all the bells and whistles, but you will be getting your foot on that property ladder and that is what counts.
If you have asked yourself these questions and you are ready to take the leap to buy your first home, get in touch today! We love helping people obtain finance for their first homes and will be on your side throughout the whole process.