Published 27 Apr 2021

Are you ready to Buy a Home? The Financial & Emotional Checklist

Buying a home is one of the biggest decisions you will ever make, so you should be completely sure that you are ready before taking the plunge. To know when you are ready to buy a house, you must consider your financial situation, but also your emotional state – are you ready to settle down in one place for several years?

If you are getting ready to buy a house and want to feel confident that you can, this guide will run you through some factors to consider, and the signs that you are ready to buy a house.  

Am I financially ready to buy a house?

The easiest way to measure whether you are ready to buy a house is to ask yourself - can I afford a house?

Unless you get lucky, it is virtually impossible to buy a house without having saved a substantial amount of money in the bank, so assessing your home affordability is the best place to start.

Do you have any outstanding debt?

If you have a mountain of debt to pay off, you simply can’t afford to buy a house. It may feel like a lengthy process, but we recommend clearing all your debt before you think about how to afford a house. As well as resulting in a bad credit score, this will damage your mortgage affordability, making it difficult for you to get a good mortgage plan. Once you are free of debt, it is easier to think about the budget you have for your house, and any added expenses.

Have you saved up enough?

Buying a house is a big investment, so you will likely have to save a large sum before you come to buying one. Most home-buyers will need to take out a mortgage where you pay at least 10% of the house up front, and pay the remainder in monthly repayments.

However, we would recommend saving around 20% for the deposit - the more you pay for your deposit, the less you will have to pay in your monthly repayment plan.

Have you thought about added costs?

Before you are financially ready to buy a home, you need to have considered all the added costs of buying one. You might think that you have enough money to meet the price tag of the home, but the cost might be a lot more than you bargained for. For example, have you factored in the added price of stamp duty, and potential council tax?

Stamp duty adds an added sum onto all houses that cost over £500,000, though this amount is subject to change.

Council tax meanwhile, is a fee that all adult homeowners must pay towards local services like schools, rubbish collection and so on.

In addition, you will also need to have a budget that can cover the cost of moving and maintenance. Moving home may mean that you need to pay for a removal van service, and you should also have some extra savings in case a utility needs to be repaired or replaced. If your budget has taken account of these added costs, then you might be ready to buy a house.

Am I emotionally ready to buy a house?

As well as ensuring that you have enough money to buy a house, you must also think about if you are emotionally prepared. Buying a house is challenging at the best of times, so rushing into the process without thinking about your emotional needs could end in disaster. To assess whether it is the right time to buy a house, you should always ask yourself the following questions.

Do you have job or relationship security?

The key to buying a house with confidence is security. You need to feel comfortable and secure in making a decision this important. One way that you can get this security is through your salary at work. Is your job situation secure, and if not, do you have a stable back-up plan? If you have a job that you enjoy and have worked for a few years, it might be the best time to invest in a new house.

If you are planning to buy a home with your partner, make sure that your relationship is a stable one. Buying a joint home will require a lot of trust in your partner, but a secure relationship can make the home buying process smoother through mutual emotional support.

Are you happy to settle in your area? 

When you are looking to buy a house, you need to find an area that truly feels like home. Nobody wants to go through the hassle of taking out a mortgage and paying for a home, only to find that their neighborhood isn’t a good fit. To overcome this, we recommend exploring your neighbourhood and the local amenities before finalising your move. You have to be able to picture yourself living in your new area for more than five years. If you don’t, it really isn’t worth the time or money.

Does buying a home suit your lifestyle?

Before you buy a home, you need to be sure that this meets the needs of your lifestyle. For example, if you are looking for a house for you and your family, you might need the extra space to accommodate children or guests. Similarly, a house will give you extra space to have that dream office space you always wanted, or even a home gym. On the other side, if you are somebody who is constantly on the go, and enjoys a flexible lifestyle, you might find that investing in a home is not for you.

Are you ready to buy your dream home?

If you think you are ready to buy a house, Peabody has a selection of high-quality homes to get your home-buying journey started. Take a look at our property search to get closer to your dream home.

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