Better save up or buy now?

Last updated on November 25th, 2021 at 09:26 am by Bill Tsouvalas

It’s no doubt that buying the home of your dreams is, probably, one of the most important decisions you’ll make. Of course, it’s fun and exciting as well, but that doesn’t diminish the challenge. In this article, we plan on answering a common question that, perhaps, has been on your mind for a while – should I save up, or buy now?

Rent and its benefits

Rent does come with a set of advantages. One of them is that you don’t have to worry about maintenance, ongoing mortgage payments, and interest rates. You don’t have to spend all your spare time at the local hardware store looking for a paint that is high-quality, and that matches the rest of the house.

Nonetheless, rent does have an array of setbacks as well. Rent makes it rather difficult for tenants to save as much as they’d like to. On top of that, if the rent rates in the suburbs are on the rise, your savings account won’t get any bigger. Additionally, the circumstances don’t allow you to do everything as you please – change the wall colour, furniture, or other things, unless the owner gives his/her ok.

Buying less, but now

Another direction you could take to become the proud owner of your home is to buy a property you can actually afford. Do you need a house now? You might have various reasons that may put pressure on you such as your family expanding, the birth of your first baby, the fact that you have been relocated with work, and so on.

Hence, if time pressures you, you can decide between a house and a unit. In fact, a unit is less expensive. So, it’s time you ask yourself – do I really need those extra rooms and a beautiful garden? Or better, could I live without them? Alternatively, if you recognise that the suburb you have set your mind to is out of your league, you should look up for zones that are affordable to you.

If you own a home, and you need to upgrade to a bigger one, you can choose between selling the property or maintaining it as an investment for equity to purchase a new one. Of course, the downside to a small home is evident – little space. That is typically more obviously felt by families extending, with babies on the way.

Numbers can give you a hint

You should establish how much you have managed to save for a deposit and the amount of money you can afford to pay on a monthly basis. At the same time, you should consider the eligibility for first-time home buyers’ grants. As a general indicator, a deposit is estimated somewhere around 15 to 20 percent of the whole value of the property. When doing the math, make sure to take into consideration various factors, such as the current expenses including credit card debts, car payments, and student loans not to mention extra home buyer costs that come along the way.

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