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For many people, finding a way onto the property ladder is next to impossible, and the pressure to start climbing the ladder can lead others to buy a property before they are truly financially ready.
The average house price in the UK is around £269,000 – London It’s more like £600,000 – making buying a property probably the biggest financial commitment you’ll ever make. Filling in a mortgage or stamp duty calculator online can give you an idea of what buying status you’re in, however, financial education co-founder Emily Boxall warns MicroFact.co.uk: “one A general-purpose calculator cannot paint a picture of your personal situation. “
Preparing to buy a home is more than just hitting a target savings goal or earning a specific salary amount. “If you don’t feel panicked, confused or overwhelmed when you’re thinking about buying a home, that’s generally a good indicator of readiness,” Boxall said.
To know that you have a good handle on your finances, these signs can help too…
1. You still have remaining funds after depositing
“If buying a home takes away all your savings, you’re not really ready, and you’re vulnerable,” Boxall said. “people After you buy a house you need to realize that houses are expensive. “When you find out you need to rewire and install double glazing, or something is damaged, it’s surprising what happens,” Boxall said. “You want to be prepared.” “
If you have enough saved and then “have enough of an emergency cushion to cover three to six months of essential expenses,” that’s a good sign, she said. “This will put you in a good position,” she says, meaning if the unexpected happens, you’ll be better able to handle it.
2. You understand the full cost of your purchase
“Buying a home can feel really complicated and there are so many factors involved,” Boxall warns. “It’s important to build your knowledge around the exact requirements, whether that’s stamp duty, legal fees, surveys and actual moving and installation costs that you can avoid. Conveniently, there are plenty of guides online and you can talk to family and friends who have also been through the process.
3. You are in control of your finances
“It’s really important to know what’s coming in, what’s going out, and what will happen if things change. If your finances are already in shambles, owning a home isn’t going to make things any simpler for you,” Boxall said.
Staying on top of your budget is crucial. “You don’t need to be an Excel expert to have a perfect color-coded spreadsheet, but it certainly helps to have a rough idea of your monthly income and expenses,” she points out.
It’s also helpful to know your credit score, “not only to help you get a good mortgage rate, but also to get a good assessment of your financial situation.” “If you have a good credit score, that suggests you’d be more willing to purchase a property than if it didn’t look good,” Boxall points out.
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And don’t turn a blind eye to any debt you may have – as long as it’s under control, it probably won’t rule out home ownership. “A lot of people have debt and term credit, but if your debt is managed, that’s a good sign,” Boxall said. Talk to a debt counselor or charity, e.g. step changeif you’re worried.
4. You’ve thought about what-ifs
“Buying a home shouldn’t rely on everything being absolutely perfect. What if interest rates drop? What if your job changes? Going through some of these scenarios can be a very helpful way to understand whether you’re ready,” Boxall said. “Readiness is not about how optimistic you are, but how robust your plan is.”
5. You won’t sacrifice your future self for today’s purchases
“One of the biggest mistakes first-time buyers make is putting everything into the property and putting all other plans on hold. If buying a house means stopping your pension contributions completely, that could be a sign that the timing may not be right for you,” Boxall said. “Only 20% of workers in the UK are currently expected to live a comfortable retirement – with 12.5 million people currently under-saved for retirement, so it’s worth checking you’re not sacrificing your future in the rush to buy a property.”