Buying property will be one of the largest investments you ever make. So before you go rushing in, it’s important that you think things through.
You might have fallen in love with a house, but that’s no reason to rush into something without taking the time to consider it properly. There is a lot more to buying a house than the initial payment; there are monthly payments, bills and tax rates to thing about.
Of course, we aren’t saying don’t buy a house, buying a house is a fantastic investment. All we are saying is don’t rush into it. Before signing for a property take the time to consider all the details first. A house is a big financial commitment and not something that you should take lightly.
Before signing on the dotted line, here are a few things you need to consider:
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Can you afford the deposit?
When you buy a house, you need to put down a deposit that cover the cost of between 10 and 20 percent of the property. When you consider how much property costs, that’s quite a large sum of money.
There are some schemes that operate on a five percent deposit, but the mortgage costs for those are much higher. It might take you a little longer to save up, but saving at least a 10 percent deposit is a good decision to make.
Don’t make the mistake of taking out a loan to cover the cost of the deposit. While it’s fine to take out a mortgage loan, bank loans and payday loans are a whole other ball game and are best left alone. If you can’t afford the cost of the deposit, spend a few more months saving up, so that you can afford the cost.
Are you eligible for a mortgage?
Don’t make the mistake of thinking that everyone qualifies for a mortgage, sadly, that’s not how it works. Mortgages are gauged on credit scores and monthly income. If you don’t have a good credit score or aren’t bringing in enough money, then you won’t be eligible.
If you find that you aren’t able to get a mortgage, try not to panic. There are other options available that you could try, such as getting a land contract. A land contract is something that allows people who can’t get a mortgage to buy a house. You find out everything you need to know about land contracts in the Land Contract Reference Guide.
If you find that you aren’t eligible for either a mortgage or a land contract, then you may need to consider your options.
Can you afford the monthly repayments?
The most important thing to consider is whether you can afford the monthly payments on your house. If you are unable to manage them, your home could end up being repossessed, leaving you with nowhere to live. This is why it’s so important that you ensure you can afford the repayments before signing for a house.
Can you afford the other costs?
On top of having to pay out for a deposit, when you move house there are also many other fees to consider. You will need to be able to afford solicitors fees, removal costs, and tax, among other things.
Buying a house is expensive, so it’s important that you ensure you can afford to cover all the costs, before buying property.