Buying a home is one of the most significant financial decisions you’ll make in your life. This is why you’ll want to take your time and make sure that everything is in order before pushing through with it. To ensure that you’re making the right decision, we thought it would be useful to put together a list of five things to consider before purchasing a house. Hopefully, this article proves to be useful in helping you make the most informed decision possible.
Job and Income
The first thing you have to consider is your job and your income. It would be financially unwise to purchase a home if you don’t have a stable source of income to rely on. Now, to be clear, stable income is far more important than the actual amount. While it certainly will be easier for individuals with higher income to purchase a home, stability is vital as you will be paying for your home for the years to come.
In relation to your income, you’ll also want to make sure that your debt-to-income ratio is low. Not only would it be unwise to make a major purchase while you are currently under a large amount of debt but it will also be significantly harder for you to be approved for a loan. Lenders take a look at your debt-to-income ratio to determine if you can afford the repayments on your loan. They do this as they want to minimize risk, as a low debt-to-income ratio means that you are less likely to default on your loans.
Speaking of lenders, you’ll also need to consider your credit score when thinking about purchasing a home. Lenders prefer borrowers with good credit scores, as this is a good indication when it comes to the risk that they have to take on. Because taking out loans with a good credit score is relatively easy, we won’t dwell on this very long. If you need to know how to buy a house with bad credit, then we’ve got just the thing for you. We here at Wealthy You are dedicated to aiding Australians who lack a good credit score via our bad credit mortgages.
You also need to examine if you have enough money saved up in order to make the required deposit on your home. Now, the deposit will vary depending on how much money you’re borrowing from the lenders. If you’re borrowing less than 80% of the property value, then you can expect your deposit to be less than 20% of the cost of the entire property. However, this also means that you’ll need to pay additional costs for Lenders Mortgage Insurance. We do this by allowing you to use the equity in your home to consolidate your debt and convert high-interest payments from credit cards into one low manageable monthly payment.
Grants and Schemes
Don’t worry If you find that your savings are depleted, as the government offers grants to help citizens purchase homes. In fact, the Australian government offers a homebuilder grant that covers up to $25,000 for new homes or substantial renovations to already existing houses.
While purchasing a home can be quite daunting, it’s not something that you won’t be able to accomplish with ample preparation. By considering the factors we listed above, you should have all the information that you need when it comes to buying a house. If you’re ever feeling conflicted at any point during the process, just look back on this list so you can reassess
Are you looking for versatile mortgage brokers? Wealthy You is an Australian mortgage company that specialises in home refinancing and can offer you a variety of mortgage solutions. Our team also comprises professionals who have been in the industry for almost a decade. If you want to know more, contact us for an obligation-free meeting!