Category Archives: Big Purchases

Are Your Ready For Home Ownership?

Home ownership is many times referred to as the American Dream. It is more and more apparent this day in age though that home ownership is not for everyone. Buying a home is a big commitment, so before making the jump, you want to make sure you’ve covered all of your bases and get information about shared equity schemes.

Low Credit Score

A credit score is a huge deal when it comes to securing a mortgage. The difference between a good score and a great score can be hundreds of dollars a month in additional interest. If you aren’t sure what your credit score looks like you can obtain a free copy from one of the three major credit bureaus. If your credit score is good then make sure you shop around for a home mortgage before settling on something.

Job Stability

Of course it is not something you can foresee, but job stability is definitely something to consider before committing to home ownership. It is a very expensive proposition, even after you have moved it in and unexpected costs pop up all of the time when you own a home. Selling your home shortly after purchasing it will result in a loss of money almost always.

Maintenance fund

There are a lot of unexpected costs when it comes to home ownership. Aside from that, the costs that go into upkeep and maintenance alone can be pretty significant. It is recommended to have at least 5% of the value of the home for this very reason.

Cost

Another factor to consider is the area in which you are looking to live in. Some cities are renter friendly and some are owner friendly. It may not always make financial sense to own especially if you are going to end up losing a lot of money and not gain any real equity doing so. Before making any big decisions, it is a good idea to do a cost analysis to make sure it is a good financial move for you.

When it comes to home ownership, nothing goes further than a little preparation and foresight. Home ownership is not for everyone, so it is a good idea to consider all of the factors that go into the equation before signing any paperwork.

At What Stage in a Relationship Should Couples Look to Buy Property?

Years ago, Life was carefully orchestrated.  You graduated high school, got a job, found the perfect spouse, got married, bought a house and then had children.  When the children were grown and you reached the magical age of 62, you retired and perhaps headed off to Florida for some golf and fun with other seniors.

Life is not so carefully orchestrated now, and we must make financial decisions our parents never imagined.  As the average age of marriage increases, it’s quite likely that a couple each has a house or condo of their own when they start dating.

Now, couples don’t always wait to buy a house until their married.  Instead, they do so earlier.

When in your relationship should you look to buy property?  There’s no one-size fits all answer.  Your best answer depends on your financial goals and status as well as your tolerance for risk.

Buy a house together after you’re committed.  Sometimes you find someone, and you know he or she is The One for you.  However, you may not want to rush into marriage.  If you both own properties but spend all your time together, why not sell each of your properties and buy one together?  A mortgage calculator can be really handy to help you determine how much money each of you would save every month by staying in one jointly owned house versus each paying for your own.

Of course, this option is best for those who can handle risk.  There’s always the chance the relationship could go south, and if you’re not formally engaged or married, you might face a messy legal battle without the protection of the legalities of marriage.

Buy a house after you’re engaged.  A safer bet is to buy a house together after you’re engaged.  This is a good option because you can take care of selling your own properties and finding the perfect house before you’re married.  The downside, of course, is that you may be doing this during the same time you’re also planning for your wedding, which can make for some busy, chaotic days.

Buy a house after you’re married.  This option is best for those who are very risk adverse and conservative.  This is the safest financial bet because if your marriage were to end, you have the legal documents to help you break up in a less messy fashion than if you were only dating.  (Though many would rightly argue that a divorce is never less messy than a break up.)

The bottom line is that our society is much more open now.  You as a couple can choose when the right time is to buy a property together.  There’s no longer a societal script you must follow.

When do you think the best time to buy property together is?

Buying your first home after marriage

One of the first things couples want to do after getting married is get a place of their own. Aside from the financial benefits of paying into something you can eventually own, buying a house means you can finally put your own stamp on a place – you’re not beholden to landlords (or parents!) over matters of décor, so you’ll be free to create that games room you’ve always dreamed of – at least until babies come along…

When looking for a house together, it’s vital to balance your needs with your partner’s. Ideally you’ll both be reasonably close to your workplaces and the local area will have facilities that you both enjoy, but it can be hard to find a place that suits you both perfectly! Joint house hunting always involves making compromises – it’s no good settling on a place that only one of you is excited about.

Of course, the first step towards owning a property together is to save for a deposit. It’s best to build up the biggest deposit you can afford, as this makes your mortgage cheaper in the long run and means you’ll qualify for larger amounts, allowing you to get a more expensive property. Even if it means putting your plans on hold for a year or two, it’s worth putting together at least 20 per cent of the asking price of your property if you can – you’ll ultimately get a better deal on variable or fixed rate mortgages.

A joint savings account is a good way to get started – as long as you both pay in regularly, you should be able to build up your deposit much more quickly than if you’d saved individually. However, don’t forget to make full use of your Isa allowances too: this is the most tax-efficient way to save, and will usually beat the interest paid on any other type of savings account. You should only look at a joint account after you’ve both maxed out your Isa allowances.

Don’t forget that it’s not just a deposit you’re saving towards – there’s a whole host of other costs associated with buying a house, from surveyors’ reports to land registry fees. Once you’ve settled on your dream property, a good estate agent should walk you through all the fees involved so there are no nasty surprises. You will also probably need some extra cash for redecorating and so on, but prioritize the main costs first!