First-timers should take the home ownership 'test'

Young people need to be really sure they are ready before they buy their first home, or they may well come to regard the property as a burden.

“Home ownership is, of course, a great way to start building wealth, and most financial advisors will tell you it is never too early to get on to the property ladder,” says Martin Schultheiss, CEO of the Harcourts Africa property group.

“But the truth is that the average age of first-time homebuyers has risen steadily in recent years, from 27 to 33 in the US, for example; from 27 to 34 in the UK and here in SA from 28 to 35, according to the latest available figures.”

This trend, he says, is due to the fact that many young adults now worry about being able to keep up the repayments on a home of their own if their circumstances or the financial climate should change, or about being tied to a property when they want to travel or perhaps relocate in pursuit of a better job.

“And we agree that home ownership should be a pleasure and not a drag, so we suggest that young people who are thinking about buying a home first ask themselves some tough questions.”

These questions include the following:

* Am I ready to take on all the responsibilities of home ownership, including regular maintenance and upkeep?

* Can I afford the other ongoing costs of home ownership as well as the monthly mortgage repayments? Such costs include levies, rates and taxes and insurance premiums.

* Am I in a secure job or business that I genuinely enjoy and intend to stay in for a few years?

* Can I afford to buy a home that I will be happy to live in for a few years? Too many quick moves can wipe out many of the gains of home ownership.

* Do I have the creditworthiness to qualify for a home loan? This means having a sound employment or income record, and a record of paying bills fully and on time.

* Do I have a good-size deposit as well as several months worth of emergency savings?

“If you can answer all these in the affirmative,” Schultheiss says, “chances are you will really enjoy living in and improving your own ‘space’. If not, you will probably be better off continuing to rent for now.”

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