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A Guide to Buying Your First Home in 2016
A Guide to Buying Your First Home in 2016
However it is not all bad news - some of these factors could also work in potential homeowners' favour.
Aspiring home owners should keep the following in mind:
1. Make sure your budget is rock solid.
The best way to prepare for more possible interest rate hikes would be to draw up a budget that assumes that interest rates increase by, for example, 2% over the next year.
2. Other factors to build into your budget.
Aside from the increase in your actual home loan, there will also be additional increases to factor into your budget.
Work out your household budget and what you currently spend on food. According to experts, food is expected to be 10% more expensive by the middle of the year.
All of these increases will affect you once you have bought your home, and could dent your affordability before you have had a chance to make your first offer.
3. Get your credit record in order
The best way to save is to have a good interest rate granted on your home loan. This means cleaning up any bad debt you have, repaying your debt commitments reliably and showing that you can save, by having a deposit ready.
But don't be disheartened, 2016 is not all doom and gloom for first-time buyers. Here are some factors that will work in aspiring homeowners' favour:
4. Time for bargains
In a tougher financial environment more homeowners will find that they need to scale down, which may work for you as an aspiring homeowner as the market may therefore weaken in the near future. It is worth looking out for bargains in a softer market.
5. Rising interest rates benefits saving for a deposit
While raising interest rates will make your home loan more expensive, it will also work in your favour when saving for a deposit.
Buying your first home is a big step, and buying a home in 2016 has its own challenges as the economic climate affects almost every part of your own individual finances. This is why you need to ensure that you are well prepared for any eventuality when making the leap and buying your first home.