How do I know it is time?

HOW DO I KNOW

IT IS time?

Some signs you are ready to take the step into homeownership

Deposit

Saving for a deposit can take a very long time and put a lot of pleasant things out of your reach while you are trying to save. But if you have been able to do this, with or without the help of incentives such as the First Home Loan Deposit Scheme or the federal government’s scheme that allows first-home buyers with a low deposit allows to purchase a home or save money for their deposit through their superannuation, you have certainly proved yourself ready.

Employment

When you have a secure job, it is generally much easier to save for that deposit. Try budgeting before you buy. Review your bank statements and bills for at least three months and determine how much you are spending PLUS how much you will spend on mortgage repayments. Having a wellpaid stable job means you should be able to cover all the costs associated with owning a home and your daily living expenses as well. If you believe you can do this, there is a very good chance to are ready. Affordability

Here’s an early question: How much of my weekly/monthly income can I realistically put towards paying off my mortgage? Experts suggest if you are spending more than 30 per cent of your pre-tax monthly income on mortgage payments, you might be putting yourself at risk. Mortgage stress looks and feels different to different people. Mild stress can come in the form of worrying about meeting future repayments. Extreme stress might mean using credit cards to meet mortgage repayments or skipping repayments altogether. If you are comfortable with what you determine is affordable, you may be ready to enter the property market.

Knowledge

Before you launch into buying, you must be as informed as possible about the market and the myriad of legal and administrative matters that buying a home entails and do everything you can to put you in the best decision-making position.

Fees and charges

Along with the deposit on your home are quite a few other expenses related to buying a property. Some are one-off payments, including the deposit, stamp duty and legal charges. Others are ongoing expenses, like those mortgage repayments, council rates, body corporate fees and maintenance costs. If you have got your head around all these, you may be prepared for that purchase.

Finance

How’s your credit-rating? This score tells lenders about your credit health, shows them how well you manage your finances, and represents your reliability as a borrower. Informed and ready buyers tend to have preapproved finance, which determines early in the buying process just how much you can borrow. With preapproved finance in place, you are clearly ready to make your move on the right property.

Commitment

When it is all said and done, there is no point jumping into the property market if you are not committed to homeownership. It is a responsibility that is one of the most significant financial decisions you will ever make, and a significant step to financial security.

For generations, young firsttime buyers have had parents, grandparents and others tell them: ‘Hang on to the first property you buy’, often speaking with the benefit of hindsight.

The view is that no property will have as much capital gain over your lifetime as that very first, very modest house you bought.