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How to know if you’re ready to buy a house
Home ownership is one of the most exciting and daunting prospects an individual faces in their lifetime. While undoubtedly a huge commitment, owning your own home is a great life accomplishment.
However, it might be hard to work out exactly when to enter the property market. Luckily, there are some common milestones and signs that can help you decide when the time is right to buy your own home.
By being aware of these signs and completely understanding the home ownership process, along with the known and hidden costs of buying a home, you will be well placed to make a financially sound decision.
Signs that show you’re ready
Oftentimes, you may be ready to purchase your own home, however, certain financial, employment or even general lifestyle factors work together to make this milestone feel virtually impossible.
However, if a certain series of factors fall into place, you know it’s time to start looking for your dream home. These factors, whether it be solid employment and healthy finances or understanding the state of the market, signal that you’re in the position to buy a home.
There are other factors that people may interpret as signs. However, experiencing the common disadvantages that come with having to rent a home doesn’t necessarily highlight a person’s mental and financial preparedness. And these two components of preparedness really are key.
Solid employment
When it comes to applying for loans to cover the deposit or mortgage for a home, financial institutions will ask for employment documentation. This documentation must encompass current employment status and also employment history.
Having this documentation means that a vendor can verify your earnings and thus approve the loan. This documentation also gives you the inherent understanding that you have the security and funds necessary to comfortably cover the costs of home ownership.
Healthy finances
Being financially healthy is of the utmost importance. Financial health revolves around having savings and possessing a good credit rating. Credit history shows lenders everything from previous loans to the number of bank accounts and credit cards you hold.
Credit history also displays debts and other financial red flags. If your finances are not in a good place, lenders will not approve any form of financing. Making it very hard to secure the funds needed for a deposit or to pay off a mortgage.
Marketing understanding
When it comes to purchasing the right property for you, at the right price, understanding the state of the market is essential. Without this knowledge of market fluctuations and other key indicators, you may buy at the wrong time.
In terms of the real estate market there are two different states- sellers and buyers. In a buyer’s market, there are more properties on sale than people looking to buy. This gives buyers the upper hand and typically results in low sale prices due to lack of competition.
In a seller’s market, there are more people looking to buy than there are homes for sale. This means that buyers are desperate for properties and this competition will increase sale prices. Therefore, for those looking for signs to buy a home, a buyer’s market is a must.
Debt management
Owning a home is a huge financial responsibility. There is of course the deposit to fund and the mortgage to furnish. However, there are also weekly and monthly expenses associated with owning a home.
In order to pay for these expenses and therefore the upkeep of the home, you need to be able to manage debt. This means coming up with a budget and sticking to it. If you’re currently managing to live off a strict budget, you will be well placed to afford a house.
You’re ready to make sacrifices
A common obstacle to home ownership is the idea of sacrifice. This is because, for many people, being able to afford a home means cutting down on personal purchases like take away dinners and coffee, clothes and accessories and even holidays.
If you’re willing to give up miscellaneous purchases, nights out and mini breaks with friends and family in order to own a house, this is a sign you’re ready to start looking at properties and commit to owning a home.
Home ownership- are you ready?
The idea of home ownership is a dream for many. However, it can be hard to determine the exact right time to make this dream a reality. Fortunately, there are key signs that indicate whether individuals are ready for the highs and lows of home ownership.
While not all of these signs are financial based, it’s always important to remember that financial stability is necessary for homeowners. Otherwise, the dream of having your own house can quickly turn into a nightmare.
With this in mind, if you’re currently enjoying stable employment and you’re ready to make personal sacrifices in order to finance your home, all the signs are there to indicate that you’re ready to own your own home!
