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At some point in life, you may want more space, or all your friends are buying houses. However, it often seems like the nicest properties are the ones that for sale, not rent.
So, it’s only natural that you might be thinking about buying a house. But is that the right thing for you right now?
Here are some questions to answer that can help you decide whether now is the right time to become a homeowner.
Why do you want to buy a house?
This may seem like an obvious question, but thinking about why you want to buy a house will help determine both your long-term and short-term reasons.
Are you looking to make a good investment? Is buying likely to be cheaper than renting? Do you want a family home for the future? The answers to these questions will help you understand the kind of house you should look for and how much to spend.
If you are not convinced by your own answers, then it probably isn’t the right time to take the plunge. On the other hand, if now is indeed the time to invest in a property of your own, you’ll be even more convinced of this after you answer your own questions.
What is a reasonable budget?
There is no denying that everyone would love to buy a fabulous, luxurious house. But we all have to understand our budgetary restrictions right from the start.
Buying a house that is too expensive for you to support is one of the worst mistakes you could make. Equally, you might have long-term regrets if you buy a place that isn’t representative of what you could have afforded to pay.
First, work out how much you can afford to borrow and whether you can comfortably handle the monthly repayments. Overextending yourself financially to buy a house is a big mistake that can lead to problems in the future.
Take the time to carefully consider your ideal budget before making any commitment.
What property will suit you in a few years’ time?
It is one thing to find the ideal house to buy for your current needs but quite another to find one that will still be right in a few years.
Are you likely to get married soon or start a family? Might your career take you to a different location? Will the house soon feel too small or cramped, or might it end up being too far from where you need to go each day?
By thinking a little bit into the future, you can see what kind of property will still suit you in the medium term.
Is it time to settle down in one place?
Is this the right time to commit to spending the next few years in one location? If not, then it probably isn’t a good time to buy a house.
You really need to spend at least five years in a house to make the purchase worthwhile considering the costs of buying and then selling the property.
If you spend at least five years in the property, hopefully, the value will have risen sufficiently to compensate for the turnover costs.
Your instincts should tell you whether it is the right moment to settle down or whether you still need to do some living and identify your long-term plans before buying a place.
Where do you want to live?
An obvious question that not everyone remembers to ask themselves is exactly where they want to live. Remaining in the same neighbourhood might be perfect, but there may be greater opportunities if you move elsewhere.
Would somewhere closer to your workplace be better or do you want a quieter, family-oriented place? Scouting out different areas of interest to you will help you make a good decision.
Otherwise, do some online research and speak to people who live in the areas you are considering.
Are you ready to buy?
If you are thinking of buying a house right now, you need to be sure the rest of your finances are in order. Check your financial situation first and sort out anything that is not quite right.
If you have never really had a handle on your income and expenses up to now, this is a good time to get one. Setting up a spreadsheet and recording your monthly comings and goings is a great start.
Have you considered all of the costs?
Buying property entails a huge expense and it doesn’t all come down to the purchase price. Utility bills, insurance, property taxes, maintenance and other related costs must be considered.
Owning your own home is a fabulous feeling but you don’t want to end up struggling to pay the bills. Try to work out the overall cost of property ownership before you buy.
If it seems too steep, then maybe you need to save some more or wait till your salary increases before buying your own home.
This article first appeared in The New Savvy.
The New Savvy is Asia’s leading financial, investments and career platform for women. Our bold vision is to empower 100 million women to achieve financial happiness. We deliver high-quality content through conferences, e-learning platforms, personal finance apps and e-commerce stores.