There comes a point in most of our lives when we leave the nest and try to make it on our own. Some of us opt to explore our freedom and create our own space by purchasing a home. While buying a home can be exciting and thrilling, it can also be an overwhelming experience, especially for virgin home-owners. It demands a certain level of financial maturity, determination and commitment. These make all the difference between just owning a home and being a successful homeowner. So, here I have put together a little checklist to help you decide.
HAVE YOUR ‘UNDER DI MATTRESS STASH’
Granny always says ‘every mickle mek a muckle’. And she is so right. When purchasing a home there is your accepted offer, but outside of that, there are fees associated with home ownership that are paid up front. These fees include the 10% deposit, closing costs, valuation and surveyors fees as well as your attorney expenses. You should also consider your 1%-3% Attorney's fee for compensation of all legal services perfor... More. So make sure you have your savings to go in with as you can use it to cover these additional costs.
MONEY ROLLING IN
It’s always great to have steady monthly income. Ideally, a mortgage should account for 30-40% of that. Other expenses such as insurance, property taxes and monthly maintenance fees can eat away at your income and fast. Furthermore, you are now the landlord and you will have to foot the bill for unexpected maintenance costs associated with plumbing, water heater, doors, damages during hurricanes, etc. These costs could all be buffered by a steady stream of monthly funds. Bear in mind that an inability to make three consecutive mortgage payments may result in penalties or even repossession.
CAN YOU SAY ‘I DO’?
A house is not a pet, nor is it that new pair of shoes you saved for, only to wear it a few times before deciding it was out of style. You can’t dispose of a home that easily. Chances are, if you’ve been pre-approved for a mortgage, you will have to make anywhere between a 10 – 30 year commitment. This requires some level of certainty, for instance, knowing the type of house that best suits your future needs and where you would want to live. Why buy a studio knowing you want a large family in 3 years? And why buy now when you plan to relocate in 6 months, or worse if you have plans to migrate? Think about your life goals and how you want to live as it will determine the level of commitment you can make to your future home.