Can You Really Afford Your Dream Home?
Home ownership is one of the biggest goals everyone would have. Within their lifetime, it is the dream of everyone to be able to procure their own home. However buying a home is not just about having money for initial downpayments. There are other factors to purchasing your dream home. Here are some of the factors you must consider to determine if you are ready to buy the house of your own:
Cost of the property
Aside from having to put aside money for the downpayment, you should be ready for monthly payments. The amount you need to pay each month would be based on the loan term you have chosen. If you have ready cash on hand, you will definitely be able to save a lot in the long run as the interest rates for long term payments can be quite high. However not many people can afford to put aside thaht huge chunk of money. So if you are opting for a loan, monthly payments will be required. As paying for a house can go on for quite a long time (minimum of five years), you should have foresight on your payables for the period of time your loan will be running for. Add in inflation and other big payables such as school fees of your child and other possible emergencies, then you will have a good picture of how your financial situation will be for the period of time you will be paying off your home. Do an assessment of your financial situation. If you feel that you will be able to handle your current payables including the loan payments, then you start looking for your dream house.
Repayment terms
One of the most practical ways to be able to purchase a home would be by getting a loan. Not many people would have the ready cash to buy a property, which is where loans come in. However loans do come with higher interest rates. But if you spread out the repayment terms into a period of time, paying off the home loan would become doable. Most people often stretch the repayment terms to the longest time possible. Instead of paying over say 5 years, most people opt to stretch the terms to 10 years or more. That way you will not have such a hard time coming out with the monthly payments. However 10 years is a long time and a lot of things can happen in that period of time. You may change jobs or there might be financial problems across the globe. You have to be ready to continue paying your dues, despite any setback as your property can be taken back should you fail to pay. Assess your current situation at your job, alongside with your life plans. If you see yourself to have steady income to cover up the payments for your home for the period of your loan plus be able to pay off other payables, then you are ready for a home for your own.
Taxes
Apart from paying off your monthly loan payments, you would also need to pay real estate taxes. This is usually paid on a yearly or quarterly basis. The amount for your taxes would depend on the location of your property and the size of your property. The bigger the proerty, the higher the taxes. So before even purchasing your home, make sure that you check out all the taxes that you will need to pay. You might be able to pay off your monthly dues. But if you will not be able to pay your taxes regularly, this will become a big problem in the long run.
Maintenance fees
One of the bigger factors to take into consideration when buying a house would be the maintenance fees. Remember that a house needs sprucing up from time to time. Your drains need to get cleaned. The roof tiles need to get fixed. All these things entail money. So you need to be ready to put aside funds for maintaining your home. Should you choose not to maintain your house regularly, the damage will become even bigger, entailing more expenses. If you are looking at staying in an apartment, you also have to add in building fees. Most condominiums have extra facilities, such as private gyms, pools and 24 hour security. All these facilities need to be paid for. So on top of your monthly loan payments, you need to be able to pay your building dues.
Always remember that buying a home is a big responsibility. You need to look far into the future and plot your financial plans for the next decade, if you wish to buy a home. That way your current lifestyle will not be compromised and you will be able to pay all your bills on time.
Photo Attribution:
Featured and 1stmage by Ambro / FreeDigitalPhotos.net
2nd image by Renjith krishnan / FreeDigitalPhotos.net
3rd image by Stuart Miles / FreeDigitalPhotos.net
