People are often in a bit too much of a rush to buy a home. We get it: it’s nice to finally be on that path to homeownership, to eventually being free from the responsibilities of rent. And after all, isn’t it what adults do? How successful can you really be in your life if you don’t have a house to show for it? How can you get married? Have kids? How can you think about making retirement plans or even last will and testaments before you own a house?
If this is all running through your head, then I respectfully request that you take a deep breath. Aside from the fact that those things may not be what you really need to worry about so much, there’s also the fact that acquiring a home isn’t something to be rushed. You may think you know this already, but this point really cannot be overstated. If you rush into this, you could end up making some pretty damaging mistakes.
So let’s take a look at some of the things you need to consider first.
The health of your finances
If you’re already in debt, or are otherwise struggling to pay your bills, then getting a home isn’t going to make things easier. To some, this may sound obvious. To others, however, getting a home seems like the best solution to these problems, precisely because full-fledged homeowners have often overcome these problems. But it’s important that you ensure your personal finances are in order before you start shopping for homes. Aim for savings of about 10% on the necessary down payment. And when it’s time to search for personal loans, make sure you land an arrangement that will work for you in the long term.
How stable do you think your job is? Losing your job when you’ve just acquired a home is an uncomfortable situation, to say the least! If you feel that you’re on shaky ground when it comes to your job – if things aren’t going too well for your company, for example, or if you feel you may need to leave due to stress or other health-related reasons – then it’s not a great idea to get entangled in further financial complication. Another thing that’s worth mentioning here is the fact that a stable job will look good to potential lenders. In fact, it’s highly recommended that you look for a home only if you’ve been in your current job for at least two years. It’s not essential, but a lot of lenders like to see it.
A while ago, it used to be that a planned tenure of about three to five years was good if you wanted to buy a home. These days, such a short span of time may not make the increased financial complexities worth it. Many would suggest that you shouldn’t be looking for a home unless you’re planning to spend something closer to six or seven years in that residence. Three to five years sounds much shorter compared to that – but even that estimate required a lot of commitment. Be sure you’re ready to be in that house for a while! If you want something short-term, consider renting a flat instead.