I like tarot. Horoscopes, fortune telling, the whole shebang. None of them, however, do much for telling you when you will be ready to buy a house. Here’s where the fine folks at Yahoo Finance come in, inspiring this list of indicators that you are ready to take the big plunge.
You’re Ready To Commit
Home ownership has to be thought of as long term. With a fluctuating house market, the cumulative costs of home maintenance, moving expenses and legal fees, home ownership isn’t something you can run from as soon as the going gets tough. Plan to live in your new home for a reasonable period of time- do you have a job that can support that? Will you be able to afford the mortgage even withstanding interest rates hikes? If you feel ready to put in the hard yakka, it’s a sign that home ownership could be for you.
Owning Costs Less Than Renting
Someone told me- around the time I moved into my first hovel- that every move, you want to be somewhere nicer. I didn’t believe them at the time but now, living in a nice place of my very own, I see that it is an inevitable of existence. With age, generally comes a disinclination to live in places with holes in their roofs. Once you’ve reached the point that your rental costs outweigh the cost of home ownership- and ensure you add in maintenance, any additional utilities, strata costs etc- you might consider renting dead money. It could be time to put the money towards an asset that can bolster your long-term finances.
Are there lots of houses on the market? Is there currently low demand for properties? You don’t need to be a star of divination to know that now would be the time to get the pick of property at an affordable price. You’ll also have more negotiating chips and a greater position of power to bargain down the price, saving yourself some dough.
Low Interest Rates
It’s important to know interest rates won’t stay the same forever. Even if you fix for a long period of time, it’s unlikely it’ll cover the entire term of your mortgage. You need to ensure you can absorb the cost of fluctuations. That said, any difference in interest rates is going to save you a huge amount of money over the course of your mortgage and buying when the rates are low is a huge bonus to your finances.
If you’ve got the deposit handy- or even a bit extra on top- it’s a big indicator that it is time to take the plunge. Putting together extra money will help you to negotiate a better deal as well as reduce your interest, both of which could save you serious money in the long-term.
I had never heard of this theory before, but apparently the housing market is also seasonally affected and it’s worth keeping that in mind. Apparently, more houses come on the market with school done for the year but it is also a time most buyers come to the market. If you can organise yourself to move in winter, you might pick up a stray bargain from people very willing to sell.