Buying your first home is always an exciting but sometimes scary time. How can you be sure that you’re ready for the big leap into home ownership? Are you sure you know where you want to buy, what you want to spend and can you really afford the ongoing costs that homeownership brings?
Here are 6 signs that you’re ready to buy your first home.
You Know How To Budget
This is the most crucial part of home ownership. Knowing how to budget effectively is absolutely essential before you decide to invest in your first home. If you don’t know how much you’re spending each month on things like groceries, utility bills, insurances and car expenses like rego and servicing, you may be shocked when you add in the cost of a monthly mortgage repayment.
You’ve Got A Good Deposit Ready – Plus More
Everyone knows they need to save up a deposit for their first home. Depending on the mortgage provider and type of mortgage you opt for, this can range from 1% to 20% or sometimes more.
There are, however, a whole host of other costs that come with home ownership. It’s not just the mortgage repayment you need to make. You may have Lender’s Mortgage Insurance added to your mortgage, increasing the weekly or monthly repayment. You’ll also more than likely have to get building and home insurance too.
You’ll also need to factor in costs for things like conveyancing fees, mortgage processing fees, mortgage broker fees, removalists and connecting utilities at your new property. Having only the deposit ready is just not enough.
You Know What You Can Afford
You may dream of a 2 storey home on the beach, but if that’s just not within your budget, then you’ll need to be smart about your search.
The best way to work out what you can really afford is to speak to a trusted mortgage broker. They’ll be able to look at your incomings, outgoings and savings to determine exactly what you can afford.
There’s no point shopping for Champagne houses with beer money!
Your Debts Are Under Control
Having your debts under control is key when you’re considering buying a home. For one, your credit score needs to be good enough for lenders to consider you as a client.
Most people will have some level of debt, but it ranges between acceptable debt and bad debt. Having a car loan that is paid on time in full each month is very different to having multiple credit cards maxed out with several missed payments.
If you are able to keep up to debt with what you owe and still have sufficient funds available that can easily service a mortgage, you’re ready to buy your first home.
You’re Prepared For The Unexpected
Being prepared for the unexpected means that you’re ready to buy your first home. Owning a home often comes with a host of unexpected costs so having an emergency savings fund built up (separate from your home deposit savings) is essential. You just never know when your oven will conk out or your hot water system will break down, so having money put aside for these unexpected expenses will help you remain financially stable.
You’ve Got No Plans To Move Soon Again
There’s no point jumping into buying a home if you’re considering a change of scenery in the near future. Home ownership is a long term investment and shouldn’t be entered into lightly, or to make a quick buck. The housing market can shift rapidly and you want to try and ensure you make a good investment decision – the last thing you want to do is buy a home and end up selling for less than what you paid, or worse, what you still owe.
If you’ve read through all these points and think you’re ready to buy your first home, give our mortgage broker in Joondalup a call today. We can help you run through the costs of buying a home and work out what you can afford. This will help to narrow your search areas for house hunting and allow you to work out exactly what you need to save before you buy.