Are You Ready to Commit to a Home Loan?
Are You Ready to Commit to a Home Loan?
Buying a home is like taking the next step in your relationship: you have to be 100% certain before taking the plunge. While it can often feel overwhelming, more Australians are making the commitment to a home loan due to the current low interest rates, allowing them to achieve their dream of home ownership.
We don’t need to remind you that a home loan is a huge commitment - sometimes up to 30 years! Approaching your home loan with an open mind and an understanding of the process may help you make the right decision when it comes to whether you’re ready to make that kind of commitment. So how do you know if you’re ready to join the many Australians living out the great Aussie dream? Use our checklist below as a guide to figure out whether you’re all set.
Are you in it for the long haul?
Buying your first home is an emotional process as much as it is a financial one. One of the ways that you can determine whether you’re in it for good is to ask yourself the following questions: “Do I genuinely want to buy a home and lay down my roots? Can I see myself living in that location for more than 5 years? Do I have a steady source of income?” If you can confidently answer yes to these questions, then you're ready to commit to a long-term home loan.
Have you saved much - and are you a good saver?
While having a generous sized deposit is essential as you are demonstrating to your lender that you can afford the down payment, it’s also important in determining what property you can buy and the size of your loan. Naturally, it’s good to have a little bit of reserve left over after you have bought your home as you don’t want to be left with nothing to live on. You want to be able to have some money aside for the proverbial rainy day - whether it’s a career change or getting married. Not only is a deposit important, but having the ability to save is paramount to committing to a home loan.
Can you afford other expenses?
Buying a home doesn’t stop at the deposit. You’ll need to consider Lenders Mortgage Insurance (if applicable), council rates, utility bills and setup, as well as home and contents insurance. If you can confidently balance these expenses as well as paying off your mortgage, then you may be ready to commit.
Do you have a lot of debt?
Also known as ‘borrowing power,’ your lender will look at your credit score history to see if there are any blemishes or outstanding payments to be made. Juggling these as well as a home loan may be exhausting - mentally, financially and emotionally. The good news is, you can improve your borrowing power in a few ways: you can improve your borrowing power by consolidating your debts, lowering your credit card limit, and save a larger deposit. Wiping out as much debt as possible before you sign on the dotted line is a great way to ensure you’re ready to commit to a home loan.
Talk to Hotondo Homes today
Ready, set, go? When you’re ready to take the next step in your property journey, turn to Hotondo Homes. We can provide you with peace of mind and help make the process a little less daunting. Simply reach out to us and we can discuss ways that you can own a home that you might not have considered. From buying house and land packages to display homes for sale, reach out to us on 1800 677 156 or visit our website for more information.
Hotondo Homes is not a registered financial advisory and therefore we recommend you speak to your financial advisor or a mortgage broker to receive expert advice before entering into a real estate contract of sale.
