When is the right time to quit renting and buy a property
Renting often works out perfectly well for working families, couples and individuals because it can be a cost-effective option. Depending on your circumstances, it can be a very good idea to save money while renting – provided that the market allows you to do so.
However, there can come a time when people prefer to get onto the property ladder – to do away with renting and to actually make an investment in the property they call home so that they have something to show for it further down the line.
The trouble is recognising when it’s the right time to stop renting and to start looking seriously for a house to buy.
Know your finances
Perhaps the most obvious statement to make here is related to your financial circumstances. You start thinking about buying a property when you have enough capital saved up so that you can secure a decent mortgage with a healthy deposit. Generally speaking, the larger the deposit you can put forward, the lower the interest rate.
Know the market
There are other matters to take into account. The state of the housing market is one of them. There’s a lot of opinion and advice online concerning the ups and downs of the housing market. Since you are not selling, the only thing that really matters to you is whether you can get a great deal on a property. It makes sense to aim for a stage when sellers may be willing to drop their asking prices in reaction to market conditions.
The mortgage market matters to you too. Speak to the experts about where the value really lies in terms of first-time buyer mortgages, since that’s the market you are operating in.
Know your job prospects
Employment is another issue to factor in. How are your job prospects looking? If uncertainty lies ahead then it may not be a good idea to commit to buying a property. If things are looking secure and you see some positive changes in the future then you are likely to be in a more comfortable position to take out a mortgage.
Know your own mind
Don’t forget to evaluate your personal motivations for buying a house. One of the attractions of renting is that it leaves you relatively transient in terms of your future plans and you can move on when it suits you. If that situation works for you then it may not be wise to buy a home.
That said, if you are ready to put down some roots then buying a house is a great idea. It means you and your family can finally call a place home.
Then there is the situation in which you want to remain transient but you have savings that are burning a hole in your pocket. Few people enjoy this particular problem, so think of it as a good thing! It may be wise to take advice from an expert if you are planning to use the property you are going to purchase as an investment and don’t intend to live in the house you want to buy.
In short, deciding to buy a house is a mixture of knowing yourself and knowing the market.
If you are looking to buy a house, you might be interested in reading our home buyers jargon buster.