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Are you thinking about buying your first home? There’s a lot to consider here and it’s important to realize that purchasing a property won’t be the right decision for everyone. So let’s explore some of the key factors that you need to think about.
Think About Your Income
Before you decide to buy your first home, it’s absolutely vital that you do consider your income carefully. For instance, you might not have a fixed income and this will be the case if you work as a freelancer. While this doesn’t mean you should avoid buying a home completely, it can make it more difficult and add to the risk. You must be aware that when you buy a home, you are entering a long term financial commitment. If you can’t guarantee that you’re always going to be in the position to afford that commitment, it’s probably best to steer clear.
Even if you do have a permanent income, then you need to ask yourself how secure you feel in your position. Are there any signs that your job or even your industry/sector could be in jeopardy? If this is the case, then you might want to wait until you are on more solid ground. That way you can gain peace of mind that you are at the right point with your career to invest in a home. Ideally, you should have been working for the same company for at least a couple of years.
The Long Term Commitment
It’s important to remember that buying a home is always going to be a long term commitment. You need to make sure that you are prepared for this. If you decide this isn’t the right choice, it’s never going to be as simple as jumping out of it. You’ll need to proceed through numerous steps to break free of this commitment. For instance, you would need to sell the home on the market. As well as potentially being quite expensive, selling your home too early can lead to a mortgage shortfall where you end up with a loss and that’s the last thing that you want.
It’s also not ideal to buy a home if you haven’t reached the point where you’re ready to settle down. You could still be looking for the perfect place to call home. A lot of people think they can buy a home to get on the property ladder and then move to their forever home. Ideally, you should be aiming to ensure that the first home you buy is the one that you will want to live in for years. If not then you could get stuck in a place where you’re not comfortable or happy.
The Responsibilities
It’s worth noting that there are responsibilities which come with owning a home that you might not be fully prepared for. If you are renting a home, then when something goes wrong you can fall back on the landlord. This is true regardless of whether the toilet is broken or there is a problem in the garden. When you own your home, everything becomes your responsibility including repairs. These can be quite expensive and you do need to be prepared for this. One of the ways that you can do that is by making sure that you are completing the right checks through the year. There are certain elements of your home that you should be checking at least once a year. This includes that boiler and that can be the difference between a minor repair or an expensive replacement.
You also need to make sure that you have room for these repairs in your budget. It’s important when you buy a home to have a rainy day fund that you can fall back on. By doing this, you can make sure that you don’t have to borrow to keep the costs of home ownership under the right level of control.
Making Things More Affordable
Next, you should think about how to make buying your first home more affordable. You should check the different schemes that are available on the market at any given time. For instance, you might find that a DBS home loan will suit your needs perfectly. Or, you could consider help to buy schemes. These are usually available for first time buyers and are well worth exploring. Even though you have to pay the money back, it can make the cost of a home far more manageable.
You could also think about fixing your credit rating. If you fix your credit rating, then you’re going to find that your mortgage is far easier to manage. There are various ways to fix your credit rating and you should do this before you commit to purchasing a home. One of the options would be to clear any debt that you have. You need to make sure that you are checking your credit card debts and being honest with your situation. There are also borrowing schemes that are devised to ensure that people can use them to fix their credit solution.
Growing Your Financial Assets
Finally, you should consider how you can use your home to your advantage. When you have a property, it can be an incredibly valuable asset but only if you utilise it the right way. Essentially, you need to take steps to ensure that you add value to the property. That way you can make a great profit when it’s time to sell.
One of the ways to do this is to make small renovations to your property each year. Minor and major changes to your home can add a lot of value. Particularly if you focus on areas like the kitchen and bathroom.
We hope this helps you understand the key ins and outs of purchasing a property. In doing so you can make sure that this is the right choice for you and your current financial situation. Alternatively, you can keep renting and this could provide you with the freedom you need to match your lifestyle.
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