Ten signs you’re ready to own a home
Ten signs you’re ready to own a home
You’ve got a steady job. No debt. A healthy bank balance. And if given the option you’d much rather binge episodes of House Hunters than the latest season of Married At First Sight (okay, maybe just one episode). But should you take the leap into home ownership? Here are 10 signs you might just be ready.
1. You’re over paying someone else’s mortgage.
Renting is a great way to test the waters when it comes to home ownership. You can try different locations and living situations and get a taste for what it’s like to pay living expenses on a regular basis while still trying to save (hello, adulting). But the trade off is, you’re limited in what you can change about the property you’re in — unless you have a very understanding landlord — and ultimately, you’re paying someone else’s mortgage off. When you buy your own property, you have the freedom to make it yours.
Change anything you want. Add a doggie door. Knock down a wall. Paint your lounge room millennial pink if that’s what your heart desires! The point is, the choice is completely your own. Though rental concessions are becoming more flexible, there’s nothing like owning your own home with 86% of millennials still rating it as important. Oh, and you can say goodbye to those pesky rental inspections, for-ever.
2. You have a housemate from hell.
While some will become lifelong friends, others can be a nightmare — unfortunately some of us don’t always win the housemate lottery. Whether it’s leaving dirty dishes in the sink, constantly using the last roll of toilet paper (and never replacing it) or moving their girlfriend or boyfriend in without telling you, a housemate from hell can provide serious “I need to save for my own home” motivation. In the meantime, having someone else help pay the rent and bills, while you save for that dream home, isn’t such a bad thing.
3. You’re sick of living with your parents. Or vice versa.
More and more young Aussies are delaying when they move out of home — or moving back in to save for a deposit. While getting your laundry folded and enjoying access to a fully stocked fridge sounds like a dream come true, everyone needs to leave the nest eventually.
Start by sitting down and working out exactly where you want to live, what you can afford and how much you will need to save. Living at home while you search for a property takes the stress and urgency out of house hunting, allowing you to make decisions with a clear head. Your parents may even be willing to act as guarantors, or help with the remainder of your deposit if you find your dream home — provided you can afford the mortgage repayments (without relying on the ‘bank of Mum and Dad’ indefinitely).
4. You’re running out of space
Having a child can really make you take stock of your current living situation. A one-bedroom apartment starts to feel very cramped once your little one begins crawling and exploring. If you’re planning to have children or want to grow your family, more space will become a need rather than a want. And if you’re looking to start your own side business or work from home more, buying a home with plenty of space to pursue your passions might also be a worthy investment in the long-term (plus, you may be able to claim home office expenses).
5. You know how to budget well
Do you pay your bills on time? Track your spending? Have a sub-saving account? Well done! Knowing how to budget will put you on a solid financial path, and will be all the more important when you have to factor in mortgage repayments, council rates and home insurance, as well as a savings ‘safety net’ for repairs, maintenance, future renovations or upgrades. Not into Excel spreadsheets? Try these 5 budgeting apps.
6. You don’t have any debt
Debt free and loving life? Congrats! It never hurts to have a good credit rating — especially when your home loan application is being assessed. Off the back of the banking royal commission, lenders are likely to evaluate a borrower’s expenses extra closely before signing off on a loan. They will scrutinise credit card debt, car repayments, HECS debt and any other repayments which could impede your ability to make repayments.. You must disclose any expenses at the time of application. And yes, this includes your Afterpay account..
7. You have a solid employment history
The job market is changing. Part-time work, gig-based jobs and casual hours are becoming the norm. But as our workplaces become more nuanced, challenges are emerging when it comes to getting a home loan. While it’s not impossible for contract workers or freelancers to get a loan, full-time employment is still considered the gold standard. Proving you have an ongoing source of income and a solid work history will go a long way when it comes to securing your finance.
8. You’re socials are telling you to
Are you seeing more side tables and deep-set sofas on your feed? Do you get excited by the latest @threebirdsrenovation post or a well-placed cushion? You might be digitally nesting. While Instagram’s algorithms should not be your sole reason for entering the property market, your priorities could be shifting. Rather than day dreaming and scrolling, write down your goals and how you plan to achieve them. Is buying a home on the list? If so, it’s time to knuckle down and start saving for a deposit (and maybe that deep set sofa too).
9. You’re happy where you live and don’t plan to leave
The beauty of being young is choice. To travel. To work. To study. Want to see the world and work in a chalet in the Swiss Alps? You can. Want to take a job opportunity interstate? No problem. Buying a home is a big responsibility. But if you like the area you live in, your career is on the right track, or you’re ready to settle down and start a family, buying a home is the logical next step — and an exciting one at that.
10. You’re financially healthy.
Having a healthy relationship with your finances is really important when it comes to entering the housing market. Short-term goals are great, such as saving for a home deposit, but long-term ‘financial resilience’ is equally as important. If your spending habits or lifestyle doesn’t align with your long-term goals, things will inevitably unravel. Not sure how financially fit you are? Take our quiz.