Before you launch into the home buying process, first analyse if you’re ready for this incredible step.
Buying a home is exhilarating, scary and a significant commitment you shouldn’t decide on a whim. It means putting down roots, preparing for the next chapter in your life and taking on the largest debt you’ll possibly ever have to pay. It’s a big decision – so how do you know when you’re really ready?
Before you buy, you should position yourself in the best purchasing position. These key signs could indicate that you’re ready to hop on the property ladder.
You have good (to great) credit
Put simply, the better your credit score, the better deal you’ll get on a mortgage and the easier it’ll be to get approved. Lenders always look at credit score, and having a good score is a sign that you’re likely to repay your debts.
To get ready to buy a house, take steps to improve your credit score.
You have a stable income
This may sound like a bit of a no-brainer, but having a stable income to commit to a mortgage is a biggie. Lenders will use your income as a guide for how likely you’ll be able to make your repayments, how much they’ll be willing to let you borrow and what interest rate they’re prepared to offer.
A general tule of thumb is that you may be able to borrow between 3 and 4.5 times your salary, if the lender is satisfied that your income is regular.
The house is more than just the mortgage. Your salary should cover living costs, insurances, taxes, unexpected issues, leisure and savings. Avoid taking on more than you can afford.
You’re ready to take on more responsibility
Owning a home isn’t just about the mortgage and home insurance. You’ll also need to be aware of maintenance – to take care of your big investment. Are you prepared to spend savings on a new roof? Cancel plans if the toilet blocks? If you prefer a more carefree lifestyle right now, don’t tie yourself into a home just yet.
You’ve saved for a deposit
How much money do you need to buy a home? While there’s no single answer to this, you can roughly work it out based on the home you want to buy. Some lenders and schemes will accept a 5% deposit, while others may require 10 or even 20%.
There are also other fees to consider when buying a home, such as conveyancing, surveys, legal costs and removals. Run the numbers and have a good chunk of cash put aside.
You’ve found an area you love
One of the greatest advantages of renting is the flexibility of moving around often, especially when you’re unsure where you’d like to settle long-term. Are you looking to buy a home in an area where you can see yourself living for a few years? A home is a long-term investment, and it can be more difficult to move locations frequently.
You know how much you can afford to spend on a home
Knowing how much house you can afford means having a clear idea of your monthly mortgage payments, insurance, taxes and additional costs. Compare how your current costs relate to the potential costs of owning a home.
Get a good idea of how much home you can afford by using a mortgage affordability calculator. By inputting your information, you can see how much your monthly payment would change, so you can get a better understanding of how much you feel comfortable paying.
Your lifestyle supports it
Perhaps you’re ready to settle down because you have an animal companion, you need more space working from home or your kids want a garden. Whatever the reason, owning a property would be easier in many ways than renting for your lifestyle.
In contrast, if your relationship is on the rocks, it may be time to wait. It’s not as easy to move out of a home with a mortgage as it is an apartment you’re renting jointly.
You want more control over your living space
Are you tired of listening to your neighbour’s music? Want a space where you can paint the walls vivid colours? Longing to hang shelves? If you want your own space and privacy, as well as a place where you have total design freedom over the décor, then buying your own place could be right for you.
Whether you want somewhere with a private garden or a place to express your personality through interiors, narrow down what it is you want from a house so your first purchase is the right one.
Find your next home for sale
Now you know whether you’re ready to step onto the property ladder, are you ready to calculate your budget and start the house hunt? Let’s begin!