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YOU’LL NEED A WEDGE TO HANG THAT DOOR
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YOU’LL NEED A WEDGE TO HANG THAT DOOR

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  1. Home
  2. Property

Five signs you're ready for home ownership

Are you ready? - by Laura Barry
  • 10 Sep 2019
Five signs you're ready for home ownership

Buying your first home can be a daunting experience. From the initial slug of saving for a deposit, to learning about all the associated costs and commitments you need to be prepared for, home ownership is a decision not to be taken lightly. So how do you know if you’re ready for home ownership? There’s a few tell-tale signs that indicate you may be ready to invest in one of the biggest assets you’ll ever have.

1. You saved the deposit

This is a bit of an obvious sign, but having the deposit saved and ready to go means you’ve already done the hardest part – saving up enough to put down a deposit! You’ll probably require a loan from a bank or financial institution to buy your home, and they will require a 15 to 20 per cent cash deposit of the value of your intended property. Don’t forget the extra costs such as solicitors, administrative fees, etc.

2. You have a good rental history 

While not essential, having a good rental history proves to lenders that you can pay rent regularly and on time with no worries, similar to a mortgage.

Woman looking at property adverts
Getty

3. You have a permanent job

Having a permanent job that you feel comfortable in and that pays you well enough to cover all the costs associated with home ownership - as well as your everyday living essentials - is key to living within your means while paying off a mortgage without experiencing hardship. A history of full-time employment is the first thing financial institutions look for when approving loans. While being self-employed won’t rule you out, you will have to provide more history about what you earn when you apply for a home loan.  

4. You have a good credit rating 

When applying for a home loan the lender will look at your credit rating to determine if you’re eligible for it. Your credit history will show the lender any previous loans you have or have applied for, how many bank accounts and credit cards you hold, your debt and other financial flags. You’ll need a good rating to be approved, so double check where your rating is at before applying so you can follow up with any issues that may appear in it. Try the credit rating checks that are now available for free online.

5. You know the market and what you can afford

Understanding the area you want to buy in and how the real estate market is progressing on a wider scale is essential when looking to purchase a property. You should be paying attention to current sale prices versus asking prices, because these can fluctuate, and whether there are more buyers than sellers at the current moment. Further to this, you should have a good understanding of what you can afford. Your monthly mortgage repayments should be less than or equal to 25 to 30 per cent of your monthly income.

You might also like:

One in six Australians fall into this debt trap 

Millennial solutions to housing affordability 

Why waiting for cheaper house prices is a bad idea

  • Property
  • Finance

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YOU’LL NEED A WEDGE TO HANG THAT DOOR
Watch 6:32

YOU’LL NEED A WEDGE TO HANG THAT DOOR

{headline}

{headline}

The most affordable suburbs for first home buyers

The most affordable suburbs for first home buyers

Maintain the value of your rental property by doing these four things

Maintain the value of your rental property by doing these four things

This is Australia's most expensive place to buy property

This is Australia's most expensive place to buy property

5 ways to update your home’s exterior under 20K

5 ways to update your home’s exterior under 20K

{headline}

{headline}

5 legal ways to reduce your capital gains tax on investment property

5 legal ways to reduce your capital gains tax on investment property

 This mum’s money saving hack has gone viral and will save you thousands a year

This mum’s money saving hack has gone viral and will save you thousands a year

How to sell your house when you have a tenant in place

How to sell your house when you have a tenant in place

{headline}

{headline}

How you can save money on your home loan by going green

How you can save money on your home loan by going green

This is how long it takes to save a home deposit in Sydney

This is how long it takes to save a home deposit in Sydney

The potential property hotspots for 2020

The potential property hotspots for 2020

The January 2020 changes all first home buyers need to know about

The January 2020 changes all first home buyers need to know about

Why you should reconsider hosting an open house inspection

Why you should reconsider hosting an open house inspection

The first mistake all first homebuyers make

The first mistake all first homebuyers make

How to know if a home isn’t worth the listed price

How to know if a home isn’t worth the listed price

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