Aug 1, 2018

Posted by in General Article

How Do I know if I am Ready to Buy a House?

How Do I know if I am Ready to Buy a House?

Do you want to buy a house, but you are not sure if it is the right decision? How do you know if you are ready to buy a house?

Here are some pointers to think about

Buying a home can be a good step…

  • If you receive a stable income and have always paid your bills when due. Lenders check your capacity to cover the mortgage payment, and your credit score, before approving you for a mortgage.
  • If you have enough money to cover the down payment on the house and closing costs. Make sure you will have at least 10% of the house price for the down payment and around 3% of the total loan for closing costs.
  • If house prices are stable in the neighborhood where you want to purchase. One of the risks of purchasing a house is that the value can drop. If this happens, you may owe more on your mortgage than the current value of the property. A situation which should be avoided if at all possible.
  • If you can pay property taxes, buildings insurance, water, gas, electricity, and other utilities monthly apart from your mortgage payment.
  • If you plan to stay in the same place for a reasonable length of time. The process of buying and selling, and moving, is an expensive one, with many costs. You can ensure that the costs are worth it if you stay in the house for a sufficient time and especially if the house prices in the area increase over time.
  • If you can afford household maintenance and repairs. Being the owner of your own home, you need to pay for all home maintenance and repairs: from a leaky tap to replacement of the roof, if necessary. Create a savings account for unexpected home repair and maintenance expenses.
  • If the possible tax advantages are beneficial to your financial circumstances. It is best to speak to your financial advisor or accountant to ascertain if the tax implications are beneficial.

The bigger picture

There are also the more global aspects of the property market to consider, apart from your own personal financial circumstances. While your decision to buy housing should be based on your immediate and planned future needs, it is always intelligent to be aware of bigger changes in the national housing market which will undoubtedly impact on future house prices and demand.

In 2018, in Ireland, continued strong demand and weak supply imply that there will be upward pressure on house values for the remainder of the year, although this is gradually slowing compared to recent years.

While around 56% of all new-builds* are housing estates or development projects, like the new houses in Meath, the majority of these are family houses, and not apartments.

The long-term trend would seem to suggest that urban apartments will be more in demand in the latter part of the 21st century as family size continues dropping, and the ageing population continues to grow.

 

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SOURCE: https://www.daft.ie/report/2018-Q2-houseprice-daftreport.pdf

 

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