Common financial challenges faced by first-home buyers?
Buying a home is an important milestone in the lives of many people, across New Zealand and elsewhere. Along with graduating from school, beginning a career and maybe starting a family, it's a key part of turning into an adult.
It's also an extraordinary financial challenge. Even if you've saved well and researched the market carefully, there are no guarantees that you can pull off purchasing a house without any difficulties. If you're getting ready to buy a home for the very first time, it's impossible to be too careful. You must prepare fully for all the financial challenges involved and strive to overcome them.
Below is a look at what lies ahead as you enter the home-buying process.
Doing all the initial prep work
Being a first home buyer can be taxing financially, mentally and emotionally. It's a difficult process, and you don't want to begin unless you've got all your ducks in a row first. There are four things you should have in place before you start to seriously consider buying a house:
- Money for a deposit: You don't need to have all the cash to pay for a house in advance, but you might need a substantial portion of it for a down payment - perhaps 20 per cent. It might take years to save all this money, so start early.
- A reliable source of income: You'll probably be making years and years of mortgage payments before your new house is officially yours. Before you begin, you'll want to be sure you have a good job with a steady stream of income.
- Approval for a loan: You may well need to take out a loan to cover all the expenses relating to purchasing a home. Do you know where you can get approved for such a loan? If not, shop around and look for lenders who can offer a good deal. Why not get in touch with our sister company, Squirrel Money?
- Additional money in savings: Aside from the cash for the deposit and a steady income to help with continuing payments, you'd also ideally have a little extra money in savings, just stashed away for a rainy day. You never know what might happen.
Are you missing any of the above four elements? It might be worthwhile to pause and reconsider before moving forward. Lining up just two or three of the four might not be enough.
Staying organised throughout the process
When you go around asking for property investment advice, one of the first little tidbits you hear is a pretty consistent one - stay organised, with a good handle on all the relevant information you'll need to complete your purchase.
For example, Bankrate recommends always having a good working knowledge of your credit score. You never know when you might need that information, whether for a loan application or mortgage paperwork or whatever else. You should also have a handy itemised list of your assets and liabilities so that everyone knows the details of who they're doing business with. If you have all this information and organise it well, the whole process will be a lot smoother.
Let us relieve your home-buying stress
Being a first home buyer, in Auckland or anywhere else, can be a stressful experience. There will probably be a lot of terminology you don't totally understand, and a lot of things you're worrying about that might go wrong. But by working with Squirrel Mortgages, we can make the process a little bit less stressful.
If you have questions about the process, you can reach out to us and ask. We have a team of experts on hand, ready to field your questions and address your concerns. Get in touch with us if you need anything at all.