Although renting is an excellent choice depending upon your financial goals, you may be in a place in your life where you want to purchase a home. You may want to establish roots, grow a family, enjoy having an asset of your own or simply enjoy the freedom of painting your walls coral-orange. Purchasing your first home is an exciting time, but it can also be a stressful experience.
The pad that you buy might not be your dream home, it might not be in the most desirable part of town, and it might not be where you want to stay forever. However, by getting a foothold on the housing ladder, you are beginning your journey up the rungs, to eventually find your perfect dwelling. Take a look at how you can take the stress out of your home purchase.
Money is a massive factor in the sort of home that you can afford to buy. Filing for a home loan application can seem daunting, especially if you’ve never done it before. Ensure that you don’t overstretch yourself financially and that you can secure a mortgage that you can afford to repay with relative ease. Keep in mind that a seemingly tiny increase in interest rates could result in an increase of your mortgage repayments, so it pays to give yourself a financial cushion. You may want to look for smaller properties, rather than opting for more space in an area that is less desirable. Or vice-versa depending upon your financial goals. If your plan is to sell the home in seven years, your decision making process will be different than if you plan on living there forever.
Who Will You Buy With?
You could choose to go it alone and buy your own home. Or you might choose to pool finances with a friend, sibling or other family member to enable you to buy a better humble abode for your first owned property. There is an element of risk when purchasing with anyone else. What happens if they want to move out early? What happens if life circumstances change? These are all questions that you need to consider. Draw up a contract and set some basic ground rules so each party knows their obligations as part of the property purchase. If after five years you are ready to move on, you can sell up, split the profit and purchase your very own home by yourself.
Where Will You Buy?
It’s all too easy to become seduced by the city centre location, the penthouse apartment and the little pad close to your favorite shops and cafes. However these properties will have the price tag to match. While they might be in a pleasant area and you can almost guarantee a profit (2008 taught us that nothing is a guarantee), you don’t want to see your quality of life diminish because you can no longer eat out, grab mimosas with the girls or catch the newest Lion King movie, as every spare bit of cash goes towards your home loan. Instead, opt for the fixer upper home on the best street and consider doing upgrading it over time. You can always save up to install a new kitchen. And in doing so, you will feel a great sense of provide as a homeowner as you slowly bring to life the home of your dreams.
With these easy steps, purchasing your first home will be a joyous experience with limited stress.
About Money & Mimosas: Money & Mimosas was started as a passion project by Danetha, a former NFL cheerleader and CFO. After a brunch conversation with girlfriends, Danetha was inspired to launch a resource to learn how they could all enjoy life while being smart with their money. Because who doesn’t want to have their money and mimosas, too?