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5 Signs you are ready for home ownership
Are you ready to buy your first home? Here are some telltale signs.
1. You've saved the deposit
This is a bit of an obvious sign, but having the deposit saved and ready to go means you’ve already done the hardest part – saving up enough to put down a deposit! You’ll probably require a loan from a bank or financial institution to buy your home, and they will require a 15 to 20 per cent cash deposit of the value of your intended property. Don’t forget the extra costs such as solicitors, administrative fees, etc.
2. You're a good renter
While not essential, having a good rental history proves to lenders that you can pay rent regularly and on time with no worries, similar to a mortgage.
3. You have job security
Having a permanent job that you feel comfortable in and that pays you well enough to cover all the costs associated with home ownership - as well as your everyday living essentials - is key to living within your means while paying off a mortgage without experiencing hardship. A history of full-time employment is the first thing financial institutions look for when approving loans. While being self-employed won’t rule you out, you will have to provide more history about what you earn when you apply for a home loan.
4. You have good credit
When applying for a home loan the lender will look at your credit rating to determine if you’re eligible for it. Your credit history will show the lender any previous loans you have or have applied for, how many bank accounts and credit cards you hold, your debt and other financial flags. You’ll need a good rating to be approved, so double check where your rating is at before applying so you can follow up with any issues that may appear in it. Try the credit rating checks that are now available for free online.
5. You know the market and what you can afford
Understanding the area you want to buy in and how the real estate market is progressing on a wider scale is essential when looking to purchase a property. You should be paying attention to current sale prices versus asking prices, because these can fluctuate, and whether there are more buyers than sellers at the current moment. Further to this, you should have a good understanding of what you can afford. Your monthly mortgage repayments should be less than or equal to 25 to 30 per cent of your monthly income.
by Celine Battendier 5 Signs you are ready for home ownership palmbeachfn.com.au February 2020 First National Palm Beach
Cnr of 6th Ave & Cypress Terrace, Palm Beach, QLD 4221 Ph: 07 5559 9600