Asking yourself whether it’s time to say goodbye to rented accommodation and step onto the first rung of the real estate ladder? Then you have come to the right place. In fact, despite the naysayers and scaremongering, it may be an ideal time for first-time buyers to take the plunge. That is, as long as they consider the factors below beforehand. Read on to find out what they are.
Have you saved a deposit?
Number one on the list of questions to ask yourself has to be whether you have managed to save a deposit or not. Now, I’m not saying that this is easy because it can be tough to pay for rent and save enough to put down on a home. The good news is that many lenders are offering 5% mortgages again, which means that it’s a little easier to get the money together that you need to begin the process.
Also, there are some cuts that you can make in other areas of your life that will help you accrue the money you need to begin your foray into real estate that much faster. One is to make your own lunch to take to work, while another is investing in a home coffee machine rather than going to the drive-through several times a day. You can even save money on your groceries by meal planning, too. Something that should help you to reach your deposit goal that little bit sooner.
What is the current state of the market?
If you have saved up a suitable deposit, then the next question to ask yourself is what the market is doing right now? In fact, this depends on a variety of factors. These include your location and the types of properties you are looking at. Obviously, COVID-19 has also had an impact on the real estate market.
However, it is worth noting that contrary to what many believe, the first time home buyers situation is not impossible. In fact, in many ways, it is actually better concerning getting a mortgage right now. This is because the benchmark rate for amortization has fallen since the beginning of 2020. Therefore, it is easier for first-time buyers to free themselves from the rental trap and get a mortgage.
Is my job stable?
If you are looking to begin your real estate journey, the next question you should ask yourself is whether your job is stable. Of course, no one is psychic and can predict every eventuality. However, some jobs have become more stable due to COVID-19 and some less. With that in mind, if you are concerned that you may be laid off or made redundant shortly, it may be better to wait until you buy your first property.
However, careful consideration is needed here. After all, the saving you could make because of the current state of the market may outweigh the risk. You can also invest in insurance products you can buy to cover your mortgage if you lose your job. Thus adding a layer of extra security, you need to get your foot on the first rung of the real estate ladder.