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A simple checklist to know if you are ready to buy a home
If the time has come in your life when you are finally considering becoming a homeowner, then you’d better make sure that you are ready for this big step. Purchasing a house is not exactly a walk in the park, and there are many factors to consider. The most important one is knowing whether you are emotionally and financially ready.
Once you have fully understood the many considerations of buying a home, then you are already a step closer to finally becoming a proud homeowner. To help you achieve that, we have put together a useful checklist. In a nutshell, you will know that you are ready to buy a property if the following statements are true.
1. You Know What You Truly Want and Need
The decision to buy something as important as a home should be made confidently and carefully because it cannot be easily returned should you grow tired of it. You have to be certain that it’s the right decision. Sure, you can sell it, but that would take a lot of work. Before choosing a property, you must already have an idea of the attributes you want and need i.e. size, location, type, and many others. If the property you are looking at meets most if not all of the criteria you set, the more likely you are to be satisfied with your purchase.
2. You Are Responsible
You should have a great sense of responsibility if you are thinking of purchasing a property. You must be responsible enough to learn more about the property, its developer, the area it is located in, and the overall real estate market in order to avoid being duped. You are also responsible for checking and verifying the credentials of the people you are dealing with. Once you are done with the purchase, the property will now become your responsibility. You need to make sure that it is well maintained and that the taxes associated with it are regularly paid.
3. You Are Independent
Once you have your own property, it is your job—and not anyone else’s—to take care of it. There will be no landlord to call if things need to be repaired or replaced. If you lack skills in the DIY department, then make sure that you save some emergency cash in case the toilet needs to be de-clogged, the shower is broken, or the air-conditioner filters need to be replaced.
4. You Are Ready to Settle Down in One Place
Purchasing a home is not recommended if you are considering moving to another city or overseas within the next five years. Selling a home that you purchased fewer than five years ago rarely results in a profit, and those who manage to break even are considered lucky. If you feel you will be moving to another city soon, or if you are considering migrating overseas (as many Filipinos do), then it is not yet time to buy a new home.
5. You Are Patient
Buying a property is a long and complicated process, and it is never advisable to rush it. Scout the entire area if you must, so you won’t ever make the mistake of buying the wrong property. You also need to take care of taxes and other government fees, and these things require a great deal of patience. Moreover, documents and legal papers take time to draft and study, so make sure that you take your time to get it right. Problems may arise if you try to expedite home buying.
6. You Know How to Be Content
If there is one thing you need to avoid, it is being envious of what other people have. Some people may be able to afford a home in Ayala Alabang or San Lorenzo Village, but if your salary can get you a townhouse in Merville Park and nothing more expensive than that, then stick to your budget and make the best out of it. There’s no point stressing over something that’s clearly beyond your means, and even more dangerous is spending money on something that you absolutely cannot afford. Wanting what others have is pointless. Know how to be satisfied with, grateful for, and proud of what you have got, especially if it came from your hard work.
7. You Have a Steady Source of Income
Unless you have a great deal of cash, buying a house is not just a one-time-payment thing. It is important for you to have a stable job or source of income to pay off monthly mortgage repayments, annual real property tax (or amilyar), and other maintenance.
A steady income flow is still necessary once you are a fully fledged property owner to keep up with financial responsibility, including any fees you need to settle, thus avoiding more debts and a bad credit score.
8. You Are Financially Sound
Just because you have a steady income flow, it does not necessarily mean that you can buy whatever property you think you can afford. It is essential to get the help of a professional to assess your financial capacity. Better yet, go to a bank and get a preapproved mortgage. Doing so will let you know just how much your monthly income can afford, thus preventing you from blowing your budget.
9. You Have an Existing Savings Account (and Actual Savings)
It is wise to save up before buying your first property. Living paycheck to paycheck will not leave you any room for emergency expenses, such as hospitalization. So make sure you are prepared by having enough savings. Financial advisors recommend having three months’ worth of pay put aside as savings. Having enough savings will take care of unexpected expenses and will enable you to avoid missing your monthly mortgage obligations.
10. You Have Minimal or No Debt at All
Buying a property is usually done with the help of a housing loan. Therefore it is important not to incur other debts while you pay off your mortgage. If you have credit card debt and other loans, you may want to sort them out first before taking out a housing loan, although this is not an absolute necessity. What is important is to have enough cash for your household expenses, your monthly mortgage responsibility, and savings for emergency expenses.
Buying a home may be intimidating, but it is by no means a tall order. A good dose of emotional and financial preparation does the trick, and before you know it, you will find yourself the proud owner of the home of your dreams.
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