Questions to Ask Yourself Before You Invest in Your Own Home
Buying your own home is a milestone that you should be proud of. Sadly, it’s not easily achieved considering all of the problems that are often associated with buying a home. You need to worry about costly expenses, you have to consider your mortgage deposit and you also need to think about how you’re going to pay the bills. There are many responsibilities involved with owning a home too. For example, do you plan to pay for all of the groceries, or will you be splitting it with someone? How much are your repairs going to cost? Will you be renovating your home in the future?
With so much to consider, it’s can be hard determining if you’re actually ready to own a home or not. To help make things easier, we’ve put together a list of questions to ask yourself before you decide to invest in your own home.
Why do you want to move?
Ask yourself why you want to move in the first place. Is it because you want to move closer to your job location, or because you want to get away from some annoying neighbours? Do you want to move because you’re struggling for space and want to start a family, or is it because you’re ready to retire and want to downscale the number of rooms you have in your home?
There are many reasons to move, but you need to ensure that your reason is solid and makes sense. Not everyone is going to have the same reasons to move home so you can’t just rely on what other people say to you. You need to find your own motivation for wanting to move, and this step can take a rather long time.
Don’t let rash decisions control you here. Maybe you’ve had a couple of rough days with the neighbours, but that’s no reason to move. Perhaps you’re getting ready to have a child with your partner, but that doesn’t mean you need to instantly move home the moment it’s confirmed. Rushing into this decision could become a financial nightmare, so take the time to really question yourself if it’s the right move to make for your life right now.
Are you financially secure?
Financial security has a different meaning for everyone. For some people, it means being able to go out and have fun with friends whenever you want, and for others, it means being able to pay a mortgage deposit at an early age. Let’s face it, if you’re concerned about your money then you’re probably not in a great situation when it comes to buying a home. Purchasing your first house is going to take a lot of money, you’ll need a massive deposit and you’re going to be working on a budget just to save up enough cash.
If you don’t think you’re financially secure then it might be best to look for ways to change your lifestyle habits so that you’re ready to make the switch. Changes such as cutting out your bad habits or cutting back on your car usage can make a huge difference in your budget. Stopping yourself from making impulse purchases and convincing yourself to enjoy life with less are both great ways to help you become more financially secure in life.
So to sum up this section, don’t force yourself into purchasing a home if you’re not ready financially. It may help to budget for your expenses so that, in the long run, you can save money and transition into a more frugal lifestyle that will help you save plenty of money for your deposit and mortgage.
Can you get approved for a mortgage?
Your credit rating is going to have a huge impact on how successful you’ll be with your application. If you’re currently in debt or if you’re struggling to pay bills and rent, then it’s likely that your credit history isn’t doing too hot. You need to have a good credit history if you want the best rates on your mortgage. If possible, spend some time fixing your financial situation so that you can bolster your credit rating. Pay back all of your loans and don’t sink further into debt or else you’ll find yourself plunging further into a pit that is difficult to climb out of.
Luckily, even with a poor credit history, it’s still possible to fix it and find If you haven’t already, it might be a good idea to look at mortgage brokers like Altrua Financial to help you get the best deal for your mortgage. Shopping around for different rates is going to be one of the fastest ways to find a good deal, and you need to commit yourself to doing your research and getting quotes from various loans and mortgage brokers.
So in short, don’t think about buying a home if you’ve got a poor credit history. Work on building up your credit rating first by paying back your debts and holding yourself back from taking out further loans. The longer you wait to repair your credit rating, the harder and more expensive it will be to actually pay for a home in the future. Don’t think so much about how you can afford a home for now–focus on clearing your history.
Are you ready for the responsibility?
If you’ve been living with family or roommates most of your life, then you need to understand that you have to take responsibility of everything that’s going to happen when you move out and live on your own or purchase your own home. Think of all the expenses and the chores that are split in your home and then realise that you’ll be in charge of everything once you move out.
For example, most people that rent have the safety of knowing that if something breaks, it’s usually on the landlord to help fix it or at least call out a contractor. You always have someone to rely on when things go wrong and you’re never fully responsible for accidental damage or freak problems that happen in your home. However, if you move out and purchase your own property, you don’t have a landlord to call on for assistance–you are the landlord! Therefore unless you are a handyman, you may need to consider looking into how to choose a home warranty that works for you to keep everything afloat.
Most people don’t understand the gravity of this. Not only do repairs have to be handled by you, but everything from yard work to washing the dishes is going to be managed by you. Perhaps you currently get help from a friend or family member to do those types of chores so you don’t dedicate much time to it, but managing your own home is going to require not only a monetary investment but time and effort as well. If you don’t feel like you’re prepared to accept these responsibilities, then owning a home shouldn’t be on your mind yet.
Some final words
Investing in a home requires a lot more from you than just money. From sorting out all of the bills to doing labour around the house to keep it well-maintained, it’s an investment that requires far more effort than you might first assume. If you don’t feel like you’re ready to take on the responsibilities, then it’s best to stay with a cheap rental so you can save up enough cash in the future. Once you’re able to answer all of these questions truthfully, you’ll have a much easier time coping with the idea of owning a home. Just remember that this isn’t a decision you can easily back out of, and you’ll be dedicating a decade or more of your time just to pay off your home purchase.