It’s exciting to imagine each room in your first home. You plan every party and gathering in your new place, where you should put the new couch and what colour you should paint your bedroom walls. But before you get ahead of yourself, it’s wise to ask yourself these important questions.
This blog post will pose some important questions that will help you to determine whether you are ready to buy your first home.
Can we afford to own our own home?
The first place to begin is by looking at your finances.
You’re in a good place to consider purchasing your first home, 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.
Don’t worry if you don’t have all of this right now. If you don’t, look into implementing a budget, getting advice from friends or family that are great with money, and/or talking to a financial adviser or mortgage broker for some extra tips and to see if they can help you in any event.
It’s also worth looking into what government grants or incentives your state or territory has to offer, as this could have an impact on your financial position
Should we buy a home or continue renting?
To buy or to rent? This is a difficult decision to make. While paying large sums of money to a bank over a long period of time may not seem appealing, there are a number of benefits.
Firstly, buying property is a long-term investment. Given the present state of our real estate market, you will most likely be able to sell your home for more than you paid for it in the future, resulting in a profit on your initial investment.
Say goodbye to your landlord’s rules! The second advantage to owning a home is that it’s all yours to do with as you please. Planning to get a pet? Or paint and renovate? Go ahead! This home is all yours, you don’t need to ask anyone’s permission anymore. Have fun with it.
Both renting and purchasing have advantages and disadvantages. However, if you are able to purchase, we recommend that you do so.
Do I have the time right now?
When you hire great professionals they will carry a lot of the work for you, but you will still need to set aside a reasonable amount of time. For example, getting all the initial information together about yourself, your history and your financials can take some time.
What also may take some time, is finding the perfect property. We definitely don’t need to remind you how competitive the property market is right now, so you’ll need patience and perseverance while looking and vying for your dream home.
Can I make some sacrifices?
There is a chance you will have to compromise while on this journey. This might be in terms of money, time, or energy, but it might also include making sacrifices in terms of the type of house you want.
The property market can be incredibly competitive, which means it’s possible that your ideal property is too expensive or will be off the market before you know it. You should keep in mind that your first house might not be your ideal house. But don’t worry, this is just the beginning; your ideal home is just around the corner.
In the meantime, write down a list of your non-negotiables and start searching for your property based on this.
Ask yourself: Will the extra parking place be useful, or will you be able to park in front? Is an en-suite truly necessary, or are there other factors to consider, such as location? Is a home office required, or might a second bedroom suffice? If it’s a non-essential item, try to be flexible. Look for something which you can add value to over time while also benefiting from capital growth.