At What Age Should I Buy My First Home?
This debate goes back and forth in every generation as young adults weigh up the fact that it’s never too early to start building equity and their worries about acquiring fixed property while job prospects are uncertain or the lifestyle they wish to pursue is undecided.
Of course buying young and paying off the mortgage as quickly as possible does allow people more flexibility when it comes to paying for their children’s education, and planning and saving for their own financial security as they get older.
But home ownership can also restrict choices when a better job opportunity appears or when a young owner wants to travel, and that is one reason why the average first-time-buyer age in SA has steadily risen over the past 10 years from 25 to 34.
However, there are still many prospective buyers who are in their 20s, and to help them decide one way or another, they may want to check the following:
Am I really committed to settling down?
Most homeowners can’t just “pick up and go” when they feel like it or when they want to change jobs, and also usually have additional responsibilities like regular maintenance and community involvement.
Am I financially ready to do this?
The majority of buyers need a home loan to finance their property purchase and to qualify, they need a sound employment record, proof of credit responsibility (a clean credit record), a sizeable deposit and, preferably, as few other debts as possible.
Can I afford to be a homeowner?
When you own a home, you need to budget for additional costs that you may not be paying as a tenant, including levies, rates and taxes, insurance premiums, maintenance and repairs – all in addition to the monthly mortgage repayment and the cost of utilities such as electricity and water usage.
In general, owning a home beats renting whatever the age of the buyer. The security of home ownership, the probable increase in value of property over the long term and the protection against rental inflation are great advantages.
But, for the young buyer particularly, other factors must be considered. Are you in a secure job that you genuinely enjoy? And can you afford a home that you will be happy to live in for a few years? Too many quick sales as a homeowner upgrades to a bigger house or better area can wipe out many of the advantages of homeownership.
However, positive answers to the questions above should help to resolve any remaining doubts about whether you're ready to buy. And the peace of mind and enjoyment of living in and improving your own home will be the rewards.
Source - BetterLife Home Loans