Buying a house is high on the list of most people’s to do list. Whether it’s for an investment or a place to live, there are many questions that you should ask yourself before taking the plunge and making one of the biggest financial decisions in your life.
There are many things which will determine if you can buy a house or not and whether it is the right time for you to do so. Here are a few questions to ask yourself before you make a decision.
What stage of life am I in?
Asking yourself where you are in relation to your job, family and financial position will likely give you a clear answer as to whether the time is right to buy a house. Many people moving out of home for the first time fall into renting as a default. However, if you have a stable job and can get a deposit together, you could put yourself years ahead by avoiding rent all together. Older people will likely find that they will need to upsize, or downsize, depending on their family arrangement.
You’ll have a hard time securing a loan if you can’t show the banks that you have a regular, stable income. If you work casually or as a freelancer, there are ways to present your application to the bank which will give you the best chance of buying a home. For example, as a freelancer or self-employed worker, you need to show the bank two years of tax return, proving your income. However your income is structured, you should be aware of all the requirements of a home loan, and how to improve or alter your situation so that you can secure some capital.
Your family and the kind of lifestyle you want to lead will be the greatest factors affecting the type of property you buy. People tend to shift to larger houses as their family grows, and smaller ones as the kids move out. Being aware of your family’s changing needs is integral to finding a property which will suit you. Being aware where you will be in 5 to 10 years-time will also play into your decision making.
How to time your buy
Timing when to buy a property can be a dangerous game. Friends, family and self-proclaimed ‘experts’ can give you the impression that the property market is ‘down’ and you should buy now, or that it is ‘hot’ and buying would be foolish.
Forecasting the market is a tricky pursuit that even the most experienced property professionals hesitate from doing. Things like the Coronavirus are the perfect example of the type of unknowns which can turn the market on its head.
As a general rule, you should buy into the market as soon as you can, regardless of if it is ‘hot’ or ‘cold’ at the time. In the long run, you’ll be better off if you buy sooner than if you wait and grab a slightly cheaper property because the market cools off. Holding property for the medium to long term is the key to making money in the property market.
To give yourself the best chance of finding the right property at the right price, consider engaging a buyer’s agent to advise you on current market conditions and what sort of property best suits your needs.