Buying your first residential property is a massive milestone to look forward to – however, it is important to avoid taking this big step before you are ready for it both mentally and financially. So here are a few critical questions to ask yourself before stepping up and taking the plunge.
Am I financially stable?
Along with taking a long, hard look at your job stability and the amount of money that you have in the bank, you should also evaluate how much debt you have and how many existing loans you are currently paying off. Furthermore, if you intend to get married or have children in the near future, you will need to factor this into your financial outlook for the next few years when doing your sums.
Note that you should also have saved up a significant amount for a down payment and cover closing costs, taxes, and insurance.
Finally, you should think carefully about where and how you will secure funding if you decide to proceed with your plans. For example, approaching the bank for a home loan makes sense if you are buying an already-existing property. However, if you intend to build your dream home from scratch, you will also need to find a way to cover the additional costs involved in the building process. A great option in this regard is private lender construction loans. These loans are usually secured, short-term loans with quick turnaround times. More often than not, you will have the requested amount in your hands within days of submitting your application.
Am I ready for the responsibility?
There is a lot of responsibility that comes with owning a house. You will need to be diligent about paying back your loan or risk incurring penalties along the way, for starters. You will also have to dedicate time, money, and energy to the general upkeep of your property. When something breaks or needs some TLC, you will not be able to simply call on a landlord to step in and get the job done – the onus will be on you to keep your new home in tip-top condition.
Am I ready to settle down?
Yes, you will always have the option to sell your house and move elsewhere should it be required. However, considering the amount of money that is spent on closing costs, construction (if applicable), and renovations, you will have to live in your new home for a long time before it makes financial sense to move again. Therefore, you need to be rather certain that you will be happy to stick around in your chosen neighborhood for a good few years before investing in real estate.
If you have answered ‘yes’ to all three questions above, there is a great chance that you are indeed ready to buy and live in a home of your very own. So, savor every step of the process, and do not hesitate to ask for guidance along the way.