For a lot of people, owning a house carries a sense of pride and freedom that you just don’t get through renting. With owning your own home you don’t have any of the rules that come from having a landlord. Also, your monthly payments are going towards an investment. And even though buying a home can be the first step to building wealth long-term, it’s essential that you get to grasps with the pros, cons and steps needed in order to achieve it.
Let’s have a look at what you should be considering before buying a house:
The most obvious advantage has got to be that your buying your own home. You can pretty much do what you want with it as long you abide by the building regulation rules. Another benefit is that you ultimately get a return of equity on your payments. When you pay rent, you are never going to see any of that money again. Your home is going to be seen as an asset so you have the ability to make money on it, especially if it is worth more when you come to sell. In some cases, this profit could be tax-free. There’s sometimes the option to release equity from your home while still living there.
So, there is certainly a fair few advantages to owning your own home however you shouldn’t overlook the drawbacks. When renting your landlord is in charge of any repairs when you own your home you’re the person who is responsible for anything that goes wrong. You also have the risk of the markets going the other way and potentially losing money on your home instead of making money. Buying a home is a long-term commitment and renting only needs a short term one. It’s much easier to move if you’re unhappy if you’re renting over having to have your home on the market. It’s also a significant financial obligation that you need to be sure you can manage.
How Much Can You Afford
If you have decided that buying a property is the right thing for you to need to consider how much you’re are going to be able to afford. Whether you’re looking to buy your forever home or need to look at Buy to Let Mortgages because you’re setting up as a landlord yourself you need to be fully aware of how much you are going to be able to manage. You need to take into consideration your current wage, whether it’s likely to change, your partner’s income, the markets, the type of mortgage you’re applying for and even take into consideration the amount of debt you already have.
Investing in a house, whether it’s to rent out or to use as a home, can be an exciting time and a sound investment but you do need to make sure it’s viable and affordable for your current situation. Do you have anything else that should be considered before buying a home? Please share them in the comments section below.