Buying your first home is one of the biggest investments in your life, and the best age to do this is in your 30s. By this age, you already know what homeownership means. Starting a family, Investment, or living independently.
It is also around this time that you have already established a good credit history for home loans, a stable career, or source of income, and this is also the age where you are already old enough to make the decision.
Here are some tips you can consider when you are ready for the big step.
Check your financial standing
Understanding how much you are earning and your expenses is one key to determine if you are ready to purchase your first home. This is also the time to check your credit score or to prequalify for a home loan. While it may be good to know how much you are earning, knowing how much a bank or financial institution can lend you is equally important.
Set the budget
It may be easy to decide on the number of rooms you want to have for your home, the floor area, and the number of floors, setting a budget will make you see if these are all possible.
The usual rule of thumb for home loan payments is 25% – 35% of your monthly salary. Always think long-term and do not jump on any decision if things look okay right now, you won’t want to stress yourself too much on making loan payments.
Emergency savings is usually 10% to 20% of your monthly salary, depending on your priorities. Always keep in mind that these emergency savings will be your lifeline if your employment status suddenly changes. This pandemic has made us all realize how important it is to have an emergency fund especially if the company you are working for suddenly decides to cut down on their employees.
The Down payment
Down payments for a house or a condominium are usually 20% of the total contract price. This is mostly paid in 2 years on an installment basis. This is the time to prepare yourself for the home loan that you will take out from the bank and to increase your savings as monthly amortizations at this time are still low.
Your must-have checklist
Do you want a house or a condominium? How many toilets and baths do you need? Creating a checklist of what you want in a home can help your house hunting faster.
Things to consider:
Now that you have already set a budget, checked your credit standing, and created a must-have checklist for your home, this is now the time to search for a house. You can start by checking property listing sites, ask your family and friends for suggestions, and work on finding a trusted real estate agent that can help you with the property acquisition process.
The pandemic has changed the game of doing house trippings. Real estate developer websites and property listing sites now have walk-throughs of the properties that they are selling, some have virtual tours with tons of attached photos you can view. It is still possible to do actual house trippings now while following the minimum health protocols to prevent the transmission of Covid.