Are You a Financially-Fit Home Buyer?

It is every peoples' dream to be a home owner, but dreams, no matter how ambitious, should always be practical and realistic. It does not help to advance your mind and your focus on what’s ahead if you do not have the means right in your own hands as we speak.

Buying a home is a big financial commitment and it should follow that your finances is committed also in your effort to call a property your own. Are you financially-fit to take the plunge?

You are sure and clear-cut on what you can afford

If you can honestly and straight out say to yourself an amount that you know you can afford in buying a house, then you can say that you are indeed financially-fit to take on a big commitment.

Know how much you can afford and the kind of property and location you want to put your money in.

When identifying how much you can afford, it is important to:

• Factor in your lifestyle.
• Look into the different types of properties that are available given your price range.
• Know whether it is near public transportation facilities and commercial establishments.
• Know its potential for sale in the near future.

You can buy a house given your regular monthly spending

Know how much you spend in a month in terms of your:

• Household bills - electricity / water / Internet / cable TV
• Groceries
• Leisure - shopping / travel
• Debts - credit card / loan settlement to help you tidy up your credit history

Given the amount you have for each of these monthly mainstays, will it still allow you to buy a house that you want?

By reviewing your finances, you will be able to know how much you should borrow from your lender. When borrowing money, factor in the cost that will go for:

• Inspections
• Conveyancing
• Stamp duty
• Real estate agent fees

Do not borrow money that will only help you shoulder the cost that your current finances cannot cover, but factor in your upfront and ongoing costs also when borrowing money. You wouldn't want to make a second loan and go through the hassles and the paperwork for the second time around, right?

You have a well-built savings account

Especially if you are applying for a home loan, you need to show to your lender that you are a good candidate to be granted with a loan. 20% deposit may no longer be a requirement these days, but keeping a well-built savings account should be your priority.

If you are about to open a bank account, aim for a high-internet savings account or a time deposit that has promising interest rates. Do a lifestyle check too. Now that you are building your savings account, maybe now is the best time to move back in temporarily with your parents so the money you pay for your rent can go to your savings account instead. Or maybe you can lessen the number of times you eat out by cooking more at home instead.

Final words

The answer to whether you are financially-fit to become a home buyer definitely takes a lot of time. And a lot of dedication and hard work. Sooner or later, you will reap the benefits of what you saved as reflected in the home that gives you comfort and security.