For a majority of the population, buying residential real estate is the most expensive personal purchase they will make in their entire lifetime, so whether or not someone is ready to make that decision is definitely something that requires careful consideration. Go over the following points before you go ahead with the sale and buy a new house.
Why Are You Considering It Now?
The good news is that half the people who are toying with the idea in their minds are indeed ready to go house shopping. On the other hand, people often take rash decisions and regret it later, which would be the other half of the people who are toying with the idea without the actual financial basis to support that decision.
Becoming a parent, a sudden influx of cash, inheritance, etc. can either put us under pressure to buy a bigger house, or make us feel like we are ready to purchase one, just because we can. The thing is, having a good enough cause or getting a hold of the funds necessary are not good enough reasons to buy a new house on their own.
However, when both a cause and the money are there to support your financial decision, there is no reason why you shouldn’t be looking for your dream house!
Are You Debt Free?
There aren’t a lot of people out there who can say they are completely debt free, but if you are one of the rare ones who can, that’s definitely a positive sign. Everything from car loans and personal loans to credit card debts and your actual credit score matter here, so assess your credit situation properly.
Have You Really Found the House You Want?
There is no way to know whether you have found your dream house, until you explore a good number of options first. The problem with this is that most busy people with steady jobs/businesses do not have the time to necessary to take twenty house tours before deciding on one. Therefore, they make the mistake of just settling for the best one they have seen yet, out of the very few that they did actually have the time to see!
A&S Homes offers an excellent solution to this particular problem, as they allow their VIP members to take virtual, 360-degree tours of the house for sale, right from the member’s current home or office. It means that you can look at a dozen homes or more in your desired location, at your own leisure, without having to take a single day off work.
The Most Important Question: Do You Have the Money for It?
Getting down to brass tacks, money is the most important factor here, and although most of us generally do not have the funds to pay for a new home in full, the real question is, do you have the financial status to pay for the house loan or the mortgage that you are about to take?
Take the following points into consideration before answering that question to yourself.
- A steady source of good income is essential, with future prospects of a pay rise
- There should already be a decent savings/emergency amount in your bank
- The mortgage/house loan should not cost you more than 30% – 50% of your present monthly income, after taxes
- Making at least a 10% – 20% down payment should be possible, outside of breaking the emergency fund
If all that seems a little too close for comfort, then factor in the income of your spouse too, provided of course that he/she is an earning partner. Most people think that they are ready to buy their first home by the time they reach their late 20s, but it’s better to wait for a little while more than be in constant debt for the better part of your life.