You’ve been thinking about buying a property for awhile, but how do you know that you’re ready to take the plunge?
Here are five signs that you’re ready for homeownership.
Buying a home is part of the great Aussie dream. While most aspire to homeownership, getting there is not for the faint of heart. So, how do you know if you’re truly ready for the journey ahead?
If you’ve taken these five steps, you’ve already built up a solid foundation for making the leap onto the property ladder.
You’ve saved a deposit
This may be an obvious one, but it’s also one of the most important. If you’ve saved up a deposit, not only have you cleared one of the biggest initial hurdles, but you’ve also demonstrated the financial discipline that lenders will look favourably upon when considering your loan application.
If you haven’t been able to lock down a full 20%, don’t be discouraged. Lenders look more kindly upon any amount saved. Plus, there are low deposit programs available to help out if you’re having a bit of trouble.
You have a solid credit score
Your credit score is a numerical demonstration of your financial discipline. The higher your score, the more attractive you are to lenders. This is because high scores are an indication of a history of responsible and conservative spending. If your credit score is in good order, lenders are more likely to offer you the best terms on your loan application.
If your score is a little less than stellar, that’s ok too. Lenders will consider other factors in conjunction with your score when looking at your loan application. If your score could use a little work, don’t worry. There are a few easy steps you can take to boost your credit score. Just be mindful that fixing your credit score won’t happen overnight. It will take some time to see your efforts paying off.
You have a good job
A history of full-time employment is one of the first things lenders will look at when considering you for a home loan. If you’ve made the jump from part-time or temp jobs to full-time employment in a career that you enjoy, you’re headed in the right direction.
A full-time, permanent job that pays well is a good indicator that you’ll be able to cover your mortgage repayments along with all the expenses that come with daily living. It’s also a good demonstration that you’re a productive and responsible adult — all positives when it comes to applying for a home loan.
You’re looking for stability
If your finances are in order, you should consider your own personal circumstances when considering whether or not you’re ready to buy a home. There are plenty of lifestyle indicators that may be pointing toward homeownership.
Are you and your partner looking to move in together? Are you thinking about starting a family? Or are you just looking for more stability in your life? Buying a home comes with more responsibility than renting, but it also means that you’re not at the mercy of a landlord or property manager. Rising rents are a thing of the past, as is the need to ask permission to make changes or renovations.
If you’re ready to take responsibility for your living environment, making the transition from tenant to homeowner is definitely a step in the right direction.
You’ve done your research and know how much you can afford
Research is key when it comes to finding the right property, and it’s important that you understand the market and how much you can afford before you start looking.
Predicting the market with total accuracy is impossible, so you should never base your buying decision on what someone has said about ‘the right time to buy’. That being said, it’s well worth doing a bit of research to understand the current state of the real estate market. This will help you make the most of your buying budget.
Speaking of budgets, you’ll need to sit down to go through your finances with a fine-toothed comb to really understand how much you can realistically afford. It’s important to develop a buying budget before you begin looking for potential properties. This will help you narrow your search, make realistic offers, and ensure you don’t overcommit yourself.
If you’ve done all of this, you’re more than prepared to buy a home. Now, go forth and find the right property for you.