Buying a home is both a huge commitment and a dream come true. Having your own house means no more monthly rent payments or asking permission from the landlord when doing a renovation. However, it also means setting aside a huge chunk of money for the deposit and monthly mortgage payments that could impact you and your family’s household budget for years. One wrong move, and you could get stuck paying for a house you can’t really afford. So before you make a decision, take a look at the questions below and see if you’re ready to buy a house.
Having enough savings is a must when buying a house or applying for a home loan. You should have enough funds to cover your deposit, monthly mortgage payments, and insurance. If you think that insurance is just an optional cost, then you’re probably not ready for such a huge financial commitment. Remember, most home loan lenders and banks require home insurance. Insuring your home is also a good way to protect yourself in case the house gets damaged because of man-made or natural disasters. Other expenses you’ll have to deal with include property inspections, real estate, tax, and other legal fees.
If you’re currently working as a contractual employee, it’s best to just rent a unit or apartment. Most lenders will require some sort of proof that you have a stable source of income, so you need a stable job to be able to get a mortgage approved. Monthly payments and other ongoing costs such as house repair or appliance installation expenses will take a big chunk from your monthly budget for many years. Once your job contract expires and you don’t have a backup plan, you’re going to end up with a mountain of debt.
Credit card debt, student and car loans, and other current financial commitments have a huge impact on how much you can set aside for a mortgage. Before you sign the dotted line on a home loan contract, make sure you’ve paid off or are still able to pay off any other existing loans. Buying a home while dealing with a lot of other debts is a big no-no. Even if you’re getting a joint loan with your other half, having to pay off other loans at the same time can be a heavy burden.
Another factor you need to consider is the stability of you and your other half’s relationship. If you’re in and out of a relationship, it’s not the best time to get a home loan. Just imagine if you just got your mortgage approved and three months later, the relationship goes sour. Aside from regrets and bitter memories, you’ll be bringing with you a financial burden that’ll take you years to get out of. Every time you pay the monthly mortgage fee, you’ll remember your ex and all the nasty things you’ve said to each other the day before you packed up your things and left. So before you take a joint house loan, be sure you and your sweetheart are in it for the long run. Deciding to put your hard-earned money on a mortgage is a decision that requires a huge personal and financial commitment. Make sure you have enough savings, have a stable job, don’t have too many other loans, and are ready for a joint loan if you’re planning to get one with your significant other. With enough funds and preparation, you’ll be able to get that loan and start paying for your dream home.