Buying a home is an important and exciting milestone. It is also one of the biggest financial decisions many people will ever take, so it’s important to be fully prepared. There are a range of questions you need to ask yourself before you take the home-buying plunge so we’ve put together five of the most important to help you on your home ownership journey.
1. What is my current financial situation?
Before you buy a home, it’s important to have your financial situation under control. Do you have outstanding student debt, or personal loans? Is your credit history in good shape? Do you have a large enough deposit? It is worth sitting down and mapping out your current earnings, debts and expenses before you consider buying a home. The peace of mind and certainty this will give you will be worth it.
2. Have I done my research?
It can be easy to be impatient when it comes to buying a home. The desire to nest, attempting to keep up with your home-buying peers, or simply falling in love with a particular property, are all factors that can make us act impulsively. It’s important to resist these urges, however, and take the necessary time to do your research.
Consider things like buying in areas with high growth potential if you plan on selling soon. Or, if you plan to start a family in your new home, make sure the neighbourhood you are buying in has the right facilities for you. Don’t feel like you need to do this alone either – it’s important to speak to family and friends to learn from their personal experiences as well as your mortgage broker to seek their expertise.
3. Am I in it for the long-haul?
In most situations, a home is a long term investment and a mortgage is a big commitment. Ask yourself if you are prepared to make regular repayments that can represent a big chunk of your income over a long period of time. Some people won’t be ready for this sort of commitment until they’ve shaken off the travel bug, while others are ready for this as soon as they have a stable job. It all depends on your priorities and personal preferences, but it is important to consider what you truly want before you commit and purchase a home.
4. Am I prepared for the unexpected?
There are many things you can do before buying a home to make sure your purchase runs smoothly. But even if you are conscientious, and tick all the right boxes like having a comprehensive building assessment and consulting in-depth about your home loan with your mortgage broker – you should still have a contingency plan up your sleeve. This means having some additional savings tucked away in a safe place, perhaps seeking a guarantor, or simply thinking through an ‘out plan’ in case your financial circumstances change.
5. Do I know which loan is right for me?
There are a range of different home loans available, and it’s important you are both aware of the different options and understand which are right for you. Don’t let yourself be overwhelmed by financial jargon. Partner with a mortgage broker that you trust, and ensure you receive simple, comprehensive explanations that allow you to make the right choice.
If you’re thinking about buying a home, Choice Home Loans is there to help you. Our network of experienced brokers can talk you through your questions and help you reach your goals.
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This article is written to provide a summary and general overview of the subject matter covered for your information only. Every effort has been made to ensure the information in the articles is current, accurate and reliable. This article has been prepared without taking into account your objectives, personal circumstances, financial situation or needs. You should consider whether it is appropriate for your circumstances. You should seek your own independent legal, financial and taxation advice before acting or relying on any of the content contained in the articles and review any relevant Product Disclosure Statement (PDS), Terms and Conditions (T&C) or Financial Services Guide (FSG).