Owning a home is a dream for many Australians and is something that can take years to work towards. It’s a big financial responsibility, so you want to make sure you’re ready to buy a house and land package in Clyde north.
So, how do you know when you’re finally ready?
You have enough for a deposit
If your goal is to own your own house and land package to build your dream home, you’ve likely been saving up for the deposit for many years. If you’ve saved enough for a deposit, then it might be time for you to finally buy a house and land package.
Depending on the property market, the type of home and the location, the amount you need to save will vary, but ideally, you want to save a 20 per cent deposit of the property’s value.
You can still take out a home loan if you’re short of your 20 per cent deposit goal, however, there will be some additional fees you need to pay, which will add to the overall costs. If you have less than 20 per cent, you will have to pay Lenders Mortgage Insurance (LMI).
Make sure you’re able to afford any additional fees and costs if you have a smaller deposit, otherwise it may be worth taking the time to save more.
Saving the deposit can be the most challenging part, so if you’ve been able to do this it’s a good sign you’re ready to buy a house and land package.
You’re financially stable
As well as the deposit, you need to have adequate finances to afford the home loan repayments. This is a long-term commitment and you need to be sure you’re in a financially stable position so that you’ll be able to keep up with your regular repayments.
While it can be hard to guarantee job security, if you’ve been working for the same employer for some years, that can be a good sign of financial stability.
Another way to determine if you are financially stable is if you have a healthy amount of savings. This includes the money to put towards your down payment, but also a separate amount of emergency savings.
You don’t want all your savings to go into your deposit. This can be risky if anything unexpected comes up, like medical expenses or car repairs, which may impact your home loan payments. And, if you’re going to be building your home from scratch, you want to ensure you have enough money for any additional features you want to add to your home.
Knowing whether you can comfortably afford your home repayments is an important factor that determines whether you’re ready to buy a house and land package.
You can afford all costs involved
Buying a house and land package includes more costs than just the purchase price. While your mortgage will be the biggest cost, there are several expenses involved with buying a house and land package in Clyde north.
Some costs that come with homeownership are one-off costs, such as the deposit, loan establishment fees, stamp duty connection fees and legal charges. There will also be ongoing costs such as your mortgage repayments, land tax, council rates, body corporate fees and maintenance costs.
When working with your builder, they will provide you with a detailed quote for the costs involved with construction, and anything that may cost you extra, such as landscaping, or designer fittings and fixtures you want in your home.
It’s important to understand each of these costs and know whether you can also afford them all. If you have budgeted for these costs, you may be ready to buy a house and land package.
You’re ready to settle down
Owning your own home provides stability. Young families or couples planning for their future may want a home to grow in. This can be an indicator that buying a house and land package is the right decision.
Building your own home allows you to have input on the design, to ensure it suits the current and future needs of your family.
If you’re planning to move within the next few years, it may not be the right time to buy land. When you buy a house and land package, you want to live there at least for a few years, otherwise, you will most likely end up losing money from the investment.
You have a good credit score
If you have a strong credit score this can help put you in a good position when securing your home loan.
A high credit score tells lenders you’re reliable with paying back the money on your loan. The better your credit score the easier it may be to secure a bigger loan, and you may be able to get a mortgage with better rates and monthly repayments.
If you don’t have a good credit score, you may want to spend time making it better, so you don’t end up having to pay more.
You’ve paid off your other debt
From credit cards to a car loan, if you’ve paid off your other debt, this can be a good sign you’re ready to buy a house and land package.
Money that you were putting towards paying these debts can instead be put towards your house and land package.
Once you’re debt-free, it also means you can improve your credit score which will help you get a better home loan. Paying off your debts shows that you are financially responsible and able to budget and keep up with payments.
Read More: The Path to Financial Independence
Apart from that, if you are interested to know about Fixed Deposit and its Advantages then visit our Finance category.
