A guide when buying your first home
When you start planning to buy your first home, one of the most challenging things is working out what may influence your budget and ultimately what you can afford to spend.
There are a number of things you need to take into account when deciding how much you can afford to borrow including family planning, possible travel plans, lifestyle needs and career changes.
In the build up to developing a budget or creating a loan, you must first ask yourself the following questions:
Are you planning to start a family?
If you are considering having children you will need to consider the reduction of your income stream during your maternity/paternity leave. You will also see an increase in your living expenses as your children grow. Recent estimates have shown that it costs approximately $28,000 a year to raise a child.
Are you planning to travel or take extended holidays?
It is a common misconception that once you buy a house you are restricted in the amount of extended travel you can take. If you plan on taking extended holidays you could consider renting your house out for a period of time to help with your repayments.
Do you have a stable career path?
Your career path will heavily influence your income stability. It is worth considering possible scenarios to ensure you have all bases covered should anything unexpected occur, especially if you are self-employed or have just started a new job.
Are you planning on renovating or making changes to your first home?
Are you happy with the house as you buy it, or will you want to recarpet, repaint or make any structural changes? The cost of these renovations should be factored into your budget.
Are you considering further study?
Further study is another factor that may reduce your income and you should consider how this might affect your ability to meet mortgage repayments. However, the extra study could also secure a future pay rise, which is another factor that should be considered when discussing the amount you wish to borrow.
Before you decide on your loan amount, remember to discuss your current budget and plans with us as we will be able to provide you with the most appropriate information for your situation.
If you have any questions, please leave a comment below!