Have you ever thought about buying your own home? While renting has its advantages, you’re more than likely to come across a house or a community where you’d like to grow old and establish a haven. Beyond external reasons like low mortgage rates and competitive pricing, you must decide if now is the best time for you. So, how ready are you?
Here are some questions you need to ask yourself before buying a home:
Do You Have a Stable Source of Income?
You should be able to demonstrate that your income is secure for at least the next few years and that you have a history of solid employment.
While all work has its share of risks, the longer you’ve been in it, or the more years you’ve spent as a business owner, the more likely your career will be seen as stable enough to support homeownership.
If you are uncomfortable and uncertain about your employment status, you may believe that now is not the ideal time.
Are You Ready to be Rooted?
Are you planning to buy a home in a region where you plan to stay for at least five years? Can you imagine yourself growing old in this house?
A house represents a significant long-term investment. If you plan on only staying in a given area for a few years, consider closing expenses, which can vary from 3% to 4% of the home’s sales price, as well as the cost of renting.
You may weigh your choices as you ponder about renting vs owning.
Have You Got a Decent Credit Score?
People who have a track record of managing their debt are more likely to get approved for a house loan with more favourable terms.
After paying off that debt and keeping a close eye on your credit report, you’ve finally been able to raise your credit score enough to qualify for a better interest rate. By being eligible for a reduced interest rate, you will afford a lower monthly mortgage payment, making homeownership a viable possibility.
Have You Set Aside Money for an Emergency?
An emergency fund can keep you afloat if you lose your job or help you pay for unexpected bills. Most experts recommend having enough money in a savings account to last three to six months — and homeowners may need more.
Home maintenance and repairs are necessary, especially when purchasing older properties that may require renovations. Buying a home without the funds to repair it will only worsen your financial condition.
Can You Stick to Your Budget?
What is the maximum amount you can spend on a home? According to the rule of thumb, home loan repayments should not exceed 30% to 40% of your monthly wage. Someone earning PHP 100,000 per month, for example, may afford to repay up to P30,000 to P40,000 per month in home loan repayments.
This is only one method of determining how much you can afford to spend on a property. Your budget should still be tailored to your specific financial circumstances.
Consider the long term as well. Don’t overestimate your ability to purchase a home. You may be making a good living now, but keep in mind that your employment situation may alter in the future. So, when evaluating your home-buying budget, it’s best to be conservative.
Are You Prepared to Make Compromises to Own a Home?
You should assess how a property fits into your lifestyle in addition to being comfortable with your financial ability to pay a mortgage.
Do you, for example, enjoy eating out every weekend? Is it a tradition for you to take a vacation every year? Will the expense of a mortgage allow you to keep doing the activities that make life enjoyable?
These are the kinds of difficult questions that people need to ask themselves from time to time. It may be preferable to put off buying a property if it requires you to give up items you are hesitant or uncomfortable to give up.
Are You Fed Up with Renting?
You’re bored of renting and exhausted of paying someone else’s mortgage payment, so assisting them in improving their financial situation while emptying your own. You can’t make any upgrades, or at the very least, doing so would be a waste of time and money.
Purchasing a home is a source of pride in itself. Finally, you may be proud of your home. Upgrade your home, plant flowers, and repaint the walls. You can finally personalize it.
Do You Have Enough Cash to Spend for Downpayment?
This is one of the payment options available to home buyers in the Philippines from real estate developers. The standard down payment is between 10% and 20% of the entire contract price.
It’s a good idea to match your down payment to your long-term plans for the house once you’ve closed.
Purchasing a home is both exciting and terrifying. It denotes that you are establishing roots and preparing for the next stage of your life. On the other hand, it also means you’re taking on the most significant debt you’ll ever have to repay.
If you answered “Yes” to most of the following questions, then the ideal time to buy a property is NOW!