Appraisal: Getting Ready To Buy Your Own Home
The journey towards home ownership can be long and daunting. However, after several years of hard work you now feel ready to actualize to live the dream. So, how do you assess yourself to know for sure that you are indeed ready to buy your own home? This is because the excitement that comes with the prospect of home ownership can be overwhelming and many a time, one can fail to take into consideration crucial optics that would impact their lives after buying that dream home. Elizabeth Kariuki, a real estate agent with Remax Kenya, contends that aspiring home buyers should ask themselves a number of questions with the first being: “Can I really afford my dream home? She shares her thoughts on a number of thought-provoking questions that those looking to buy a home should consider.
1. What are my obligatory monthly expenses?
Everyone working professional has monthly obligations that must be taken care of come what may. For example, for a buyer with family, he/she must think about expenses relating to food, rent, and rent among many other typical household expenditures courtesy of families. When getting ready to buy a home, you must think through how you are going to handle the obligatory monthly expenses that you have. Will the purchase adversely impact your ability to meet your family obligations? Therefore in assessing your capability, list down all the expenses and think about how they will be paid in view of the new purchase.
2. Who are my dependants?
The spirit of Harambee is prevalent throughout most African families. From time to time, we get called upon to assist members of our family who are in financial distress. These dependants such as family members and their requirements need to be factored in. So think about those who rely directly on your income and the probability of how the purchase will influence them. This is because their quality of life is directly affected by your financial input or lack thereof. Note down each dependants’ periodic requirements and how you plan to handle them as they fall due.
3. How much disposable income do I have?
Disposable income is the part of your earnings that has no obligations. For example, in this case, it may be the amount after you have deducted the monthly obligations and dependent requirements. Any home financing plan should never exceed the amount of disposable income available. This is to ensure a stress-free home loan repayment.
4. How much am I willing to pay monthly?
You may not want to utilize all your disposable income for home financing depending on your unique needs and requirements. The main question you need to ask yourself is, “how long am I able to repay my loan?” This shall depend on the home you wish to purchase.
5. What if things change?
This seems like a pessimistic question but it is a very wise question to ask because life is never constant but full of unforeseen situations. After all, it is better to be forewarned and forearmed. Difficult questions to pose can be “what if I am unable to continue making payments?” or “what arrangements are in place in case the worst should happen?” This is why many home loans have various insurance covers so that the home acquisition journey ahead can be made as smooth as humanly possible.
After you have asked and answered these questions above you shall be well on your way to having a very realistic picture of the house you can afford. As for where you can find it, working with a real estate professional will ensure that you do not walk this journey alone.
Adapted from: http://blog.remax-kenya.co.ke/how-much-house-can-you-afford/