Buying your own home is no easy feat. It is an incredible milestone in life that takes commitment. In a sense, it is the type of commitment which you could see yourself honoring and adhering to for a long stretch of time.
As buying your own house requires a whole lot of contemplation and consideration, it is imperative that you weigh your options well before arriving at a favorable decision and once you have, you need to be certain that you are financially sound to make this big leap.
There are a lot of things to consider when buying a house—
Should you buy a house and lot in Talisay or a condominium unit in Bacolod?
Can your savings cover the down payment and will your income suffice to sustain the monthly payments?
Should you buy now or wait until it is offered cheaper?
These are just a few things that may be running through your mind. So, how do you truly know whether or not you are ready for one of your life’s biggest investments? Here are five ways to tell.
1) You are ready to commit to one place
If you are still basking in the afterglow of your wanderlust years, then you may want to shelf the idea of buying your dwelling for at least a few more years. The general rule is that you need to live in your new home or condo for at least five years before you can finally recoup the expenses you paid for buying it.
Can you envision yourself living in one spot for the next five years or so? Consider where the house is located in, the job that you currently have and anything that may potentially affect your decision in settling in the neighborhood for five years.
If a potential job opportunity might necessitate the move, it can be manageable as it happens all the time. However, if losing money in the process is not an option then do not buy too soon if you anticipate a move.
2) You have stable finances
One important thing to consider when you are in the market for the purchase of a home is the monetary aspect. You need to be 100% sound that you have your finances in order before you can buy a house—this is especially true if you are going to need a housing loan.
Being financially sound does not only equate to having a sizable amount of money saved (although this would certainly help). You must have a stable job that pays you well and gives you regular income and a good credit score. These are pivotal factors that will aid you in weighing the type of loan you should apply and would qualify for as well as the interest rate you will receive.
Further, you should have the necessary skills to manage your money and debts well and should have adequate financial cushion. Struggling to make ends meet such as having a hard time paying rent and living from paycheck to paycheck are both vital signs you are not yet ready to buy your own home.
3) You understand the market
Before arriving at a decision, you need to understand the trends of the real estate market in your area. Highly competitive markets tend to charge exorbitantly for the price of a home.
With this knowledge in mind, you need to consider if you are comfortable with their asking price.
If you are confident, do some research and talk with those who are well-versed in this area such as a local real estate agent so that you can figure out what is right for you.
4) You are ready for the additional responsibility
Most novice real estate buyers are often under the misguided notion that owning is somewhat similar to renting. Some think it is just paying a mortgage company instead of a landlord. This belief could not be any more incorrect.
When you are an owner, you have more responsibility than just being a renter. For example, if suddenly fridge stops working, you would need to find a contractor to look at it and examine the estimates on the repair and pay to have it fixed.
The truth is, it requires more effort to fix and maintain everything in your condo or house while you can simply ask your landlord to fix items for you when you are renting.
5) You are willing to take risks
Any significant investment, which invariably includes real estate investments, is a risk. The housing market has seen its fair share of ups and downs so, if you are looking to buy, be certain that you are aware of the risks involved.
Have adequate knowledge if you are looking to buy but also consider that more often than not, the value of your home can go down and this may be due to forces which are beyond your control.
If you are comfortable with this thought and if your assets are not all tied up in your home then you are most certainly ready to buy.
Buying your very own place to live in is one of life’s most significant commitments which makes it natural for one to approach the idea very cautiously. Knowing what you are comfortable with, coupled with a sound financial backup peppered with an awareness of the five things above will reveal that you are indeed ready for this big milestone in life.