PROPERTY NEWS - There is a right time for everything, especially to begin planning to buy a house. Most people will need to rely on their own efforts, rather than the support of family, to buy a house.
These days, buying a house is more difficult for young people than it was for previous generations. In order to get on the property ladder, you'll need to accumulate both a large store of money and good standing. Let's look at where you need to be in life to make buying a home a live option.
When should you start thinking about buying?
The thought of buying a house should come to you on the day that you earn money for the first time. While you will be using your salary for rent, food, recreation, and transport, you'll also be compelled to put some of your money away. Much of this will go to prudential services, like medical aid, but a remainder will be saved.
Your savings are always for something: a rainy day, a computer, a car, or a holiday. They are for whatever cannot be acquired comfortably from one instance of your income. Since buying a house requires an extraordinarily large amount of money - the average deposit put down in South Africa has risen to over 20% of the total price of a house - it might be prudent to divide your savings.
Set your banking up so that you have one savings account for your medium term goals, and another for your long-term goals, like purchasing a house. Alternatively, consider using a less liquid store of capital for your home-buying plans.
Investing the money that you've demarcated for you home deposit in financial instruments like bonds, unit trusts, or in a managed fund, can provide growth that is greater than you would otherwise receive from your cash remaining liquid in your savings account, and will act as a disincentive to break with your saving intention.
Adopting the intention to buy a house at the earliest junction of your career, and acting on that intention, can make the home-buying process much smoother when, later in your life, purchasing a house becomes a live concern.
How do you know it's time to get the home-buying process going?
Once you've had a few years of earning an income, you'll likely be saving larger and larger increments towards your future house. Getting on the property ladder should happen as soon as possible - you can buy your first house within a year if you've prepared well.
You'll have an idea of the area in which you'll want to live - and with the help of a home loan calculator, you will be able to figure out your eligibility for a home loan. If that amount comes close to your first property's value when combined with the money that you've put away for a deposit, then you know that it's time to act. From here, enlist the aid of a good estate agent, and use a top bond origination service, to increase the odds of being granted a home loan and to guarantee that you are getting the best possible rates.
There is no fixed age by when you should have bought a house - people are faced with many circumstances that may speed up or hinder the process. But with a few prudential moves, you can bring the day when you can call the roof over your head your own nearer.
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