If you’re in your thirties, it’s likely that you’re entering the prime income-earning years of your life, and may even be considering buying a house. As a young person, it is essential to know what you are up against. Buying a house is an investment that requires smart savings and understanding the housing market.
Fortunately, the housing market is not as daunting as people make it seem, with sufficient savings; you can get that dream home.
Here are a few tips that can assist you as a first-time buyer with your home-buying process. Put these tips into practice, so that your first home can become a blessing and not a financial burden.
Pay off all your debt and open a savings account.
Buying a new home is expensive, but it is more costly if you have other long-term commitments you need to pay every month. Depending on your income and other financial obligations, paying off a home loan can typically take 10 years or more. This is why it is crucial to pay off other long-term debts that might cripple you. Before buying your first home, make sure you’re debt-free and have an emergency savings account to cover three to six months’ expenses in place.
How much you can afford?
There is nothing worse than buying what you cannot afford. Before you get emotionally attached to a house, look at your monthly budget to determine how much you can pay every month. You must leave room in your budget for other monthly essentials. It may also be useful to use a bond calculator to make sure that you know the full extent of the costs that you are committing to.
Save up for a down payment
If saving up to pay cash for the total price of a house isn’t attainable for your timeline, it is recommended to save for a down payment of at least 20%. A bigger down payment means that will not have to take out a substantial loan. The more you pay upfront, the smaller your loan. This also means that you will pay less interest over the years.
Attend various home show days
This will help you decide the type of house you would like to purchase, the neighbourhood and whether or not the house is worth the money. When buying a home, it is essential to consider amenities around the neighbourhood. Here’s a helpful checklist to look at before you go.
As exciting as the prospect of becoming a homeowner is, there are various things to consider before buying a house. However, if you do your homework and plan your finances, it will be one of the most significant milestones in your life.