Deciding to buy a home is one of the biggest financial decisions you’ll ever make. There is a large amount of money involved in the transaction, and your decision will impact your life for many years. As such, there are a lot of factors to consider when deciding to buy a home, so take your time and go through each of the carefully.
Understand Your Finances
The first thing you need to do when deciding to buy a house is understand your finances and how much house you can afford. This means looking at your budget, seeing how much you’re currently spending on rent and other expenses, and understanding how much you’re comfortable paying. It also means checking your credit score so that you know what interest rates you’ll qualify for when shopping for a home loan.
There are a lot of tools out there that can help you, like this calculator from Tomorrow Finance: http://www.tomorrowfinance.com.au/home-loan-calculator/. Just plug in your information and it will give you a good idea of what you can afford.
Knowing the True Costs
Beyond your finances and the mortgage, there are other costs that are involved as well, which you need to be prepared for. This could include a lot of things that you may not have needed to pay while renting – including association fees, higher insurance premiums, and more utilities.
Having a house also means that you’re responsible for the maintenance – no more calling the owner to get it fixed. This not only will take time, but also cost money, so you should plan accordingly when looking to buy.
Finding the Right Place to Live
Once you get the financial picture of how much house you can afford, you need to find the right place to live. This is probably the harder part, since there are so many options and no two houses are exactly the same.
Buying a house is a long-term commitment, and the transaction costs are very high. So, even if your house value stays the same, if you sell in the future you could still lose money due to commissions and other costs. As such, make sure you’re comfortable with your decision.
Think about the future implications of everything when you’re buying a house – does the area have good schools? Is the home someplace I can raise children? Is the house accessible enough for older parents or other people? These are all important facts to keep in mind when looking at homes, so that you don’t just change your mind after living their for six months.
Finally, before you pull the trigger and make an offer, make sure that you double-check everything. Look at your finances one more time, understand where the best loan rates are, and make sure that you are really happy with the house you’re buying. Drive over there at multiple times of day, and visit it more than once to get a real feel for the inside. Mimic your commute to work to see if that is conducive, and just try to get a good all-around feel for the house. That way you can be sure that it works well for you.