This is a question that gets asked often but the truth there is no “right time” when it comes home ownership. The sooner you make the decision, the better it is for your financial future. A home purchase could be seen as the most significant purchase that most people will make in their entire lifetime and there is no reason why it should be rushed. There are several options in the market and you might want to check out Reward Home Builders Sydney to get an idea of what is possible. The status of home ownership could contribute to your financial success or your ruin.
When to Buy
Buying or building a home could be beneficial at any age. If you have the financial capabilities, there is no reason why you shouldn’t give it a thought. Regardless of age, you know you can afford a home when:
You can comfortably afford the monthly payments and the expenses
Get approved for an affordable loan
Plan to keep the home for the long haul
Can afford to take the risks that come with homeownership
Ready for the responsibilities that come with homeownership
None of the mentioned reasons suggest that you’ll be deemed irresponsible if you decide to own a home at a certain age. Homeownership is expensive and can be overwhelming if you’re not psychologically prepared. This does not mean that renting doesn’t have its own set of challenges but it will be easier to pack and leave if things are not working for you.
The Age Where Most People Buy Houses
You should live and make decisions at your own pace, but it could be helpful to know what age when people get into homeownership just for sake of perspective. There could be statistical reasons why home ownership increases with age.
According to the National Association of Realtors, the median age of homeownership is 32 years. Most of these buyers have a median income of $75000 which makes them fortunate than most people.
Why You Should Buy Young
If you have the money and financial ability to buy young, there are a couple of benefits you could get form starting early.
Building Wealth: If everything goes well, homeownership can be a great source of building wealth. If you take a mortgage, you will be forced to save. You will be building equity as you pay the mortgage. You won’t be giving 100% to a landlord as you get to save with each payment.
Appreciation: Even though there are no guarantees that your home will increase in value, but that is what usually happens in most instances. Real estate investment can be used as a hedge against inflation when the market is turbulent. You can grow your wealth when the value of the piece of real estate appreciates.
A place to call your own: You’re completely in charge when you own the home. The look and feel can be customized to your own taste. You also have the opportunity to make improvements that add value your space with seeking permission from the landlord.
Why You Should Wait
You don’t have to rush homeownership if you’re not fully prepared. Waiting is important that you can also pay in different ways. You don’t have to worry about buying and selling which can be a pain.
Certainty: You’re more certain of what you want in a home when you grow older. Despite the future being uncertain, you’re more in control of your career progression. There is an element of stability compared to when you’re young. There is the chance that you might have saved up and a big portion could go towards paying the down payment of the home.
Financial Strength: Your financial strength is likely to grow as you get older. It is easier to get what you prefer as you enter your high-earning years which usually start after turning 30.
Things to Consider Before Buying a Home
Local Markets: The local markets could determine if you buy or rent. The rent could be extremely expensive and you might find it cheaper and more convenient to pay a mortgage as you get to benefit in the long run.
Down Payment: The down payment might help in reducing the cost of the monthly payment. The best way to avoid paying private mortgage insurance is by putting more than 20% down payment. There are some lenders that will allow you to put a small down payment which could make it easy to own a home at an early age.