How to tell if you’re ready to build your first home
House ownership is an investment milestone most Australians aspire to achieve. And if you can build your ideal home, that’s even better. Although there are several good reasons to build and own your first house, this is a big financial commitment and, if you’re not ready for it, you may soon be facing a financial nightmare rather than enjoying your dream new home. If you want to ensure that you are ready to build your own home before making any commitments, then you should consider the following aspects.
You are responsible with your finances
Can you pay monthly bills with ease? Do you have a clear idea of your incomes, expenses and savings? Do you have some money left at the end of the month to build your savings? If not, then you may want delay building a home until you’re financially secure. If your financial house isn’t in order before you start building, you may struggle to keep up with mortgage down payments, insurance costs, legal fees and maintenance expenses.
You have a steady source of income
If your career is moving forward and you have a fair idea of how much you will earn in the next few years, then the financial planning for building a home will be much simpler. Your income will determine the size and location of the home you can afford, as well as which home design, materials and finishes you choose to use during the building process. You will also need to show proof of a steady income before you can secure a loan or apply for a pre-approved loan.
Your have enough savings to back you up
Not only will you need a sizable amount of savings to use as a deposit on your loan, you will probably also be using some of your savings to contribute to extras such as moving expenses and stamp duty. Ideally, you should also have a six month emergency fund available as added security if your financial situation changes due to unforeseen circumstances.
You are ready to stay in one place for the foreseen future
Yes, you can always sell your home if you feel like moving, but building a new home is costly, and selling it prematurely is even more expensive. It is advisable to stay put until your new investment has grown enough to cover the initial expenses of building, moving and furnishing your new home. Many financial planners recommend waiting at least five to seven years before selling your home.
You want to live in a home that inspires you
If you are financially stable and ready for home ownership, then you may be wondering if you should buy an existing home or build a new one. By building your first home you have the opportunity to start from scratch and live in a brand new home that fits your requirements, lifestyle and style choices perfectly. A new home also needs much less maintenance and renovations once you’ve moved in, which makes it a more cost-effective and convenient option over time.
Ross North Group has a wide variety of house and land packages available in Perth to choose from. Our selection of home designs together with our in-house finance services can make your dream of owning the perfect house an effortless and affordable reality. All of our homes are built from quality materials and come with a choice of finishes that include flooring, window treatments, reverse cycle air conditioning and landscaping. For more information call us at 08 9431 81508.