The Top 4 Things to Consider When Buying a House
For many, the decision to buy a house is the most significant financial decision they’ll make in their lifetime, as homes are typically the highest value purchases a person can make.
So, it makes sense that there are several things you need to consider before taking the plunge and deciding to buy a house, including whether you’re financially ready and whether the house itself is a good investment for you and your future.
So, here are the top 4 things you need to consider before buying a house.
All of the costs.
While this is the most obvious thing to consider – and probably the factor you’ve thought about most – you may not be taking into account all of the costs involved with buying a house.
Of course, there’s the price of the house. Although, for most people – as most won’t buy a place straight out and will acquire a mortgage instead – the more relevant cost will be the price of the deposit and the monthly mortgage payments you’ll have to make until the mortgage is paid off.
On top of this, though, there are the costs you don’t think about: valuation surveys carried out by your mortgage lender; stamp duty, if you’re buying a property for over £125k; possible buildings surveys and homebuyers reports, in addition to any moving costs, the costs of fixes, repairs and refurbishments and any new furniture needed.
These less considered costs can add up to thousands and even tens of thousands of pounds, which can put a wrench in your financial situation.
The location – both as it is and in the future.
Most people check the location before buying a house, but often home buyers – and especially first-time homeowners – underestimate what they need and want from an area.
Is the neighbourhood considered safe? Are there amenities you need nearby – for example, shops, schools, parks or a gym? If you don’t have a car, is there good public transport? Are the nearby roads a nightmare at rush hour?
More than this, though, you need to consider what the location you’ve chosen will look like in the future, in order to determine if your home is going to be right for you in the long-term, in addition to the likelihood of its value increasing – or, at least, not decreasing – over time.
Look at the upcoming plans for potential main roads, bridges, and building developments in the area you’ve chosen, and, after taking these into account, you can then decide if your desired home is genuinely in the right location for you.
The house itself.
When deciding whether the house itself is worth your hard-earned money, there are two things you need to consider: whether the house is structurally sound and whether it has everything you need to function.
To decide the latter, you should create a list of ‘non-negotiable’ items before you even begin house hunting, including the number of bedrooms and bathrooms you want, taking care to consider how much storage you’ll need and whether the house has enough well-positioned power outlets.
If having lots of natural sunlight is important to you, you’ll also want to make sure your house is south-facing, and if you have pets, you’ll need to decide whether the place you have your eye on has enough outdoor space.
More importantly, however, you need to make sure the house is structurally sound so that you don’t accidentally end up with a money pit that costs tens of thousands to repair.
This is why it’s highly recommended that you pay for a thorough inspection of the house before you buy, which will bring to light any structural problems – or conditions such as damp and mould – which will save you money and hassle in the long run, by protecting you from a bad home investment.
On the whole, buying a house is usually a good long-term investment, as house prices tend to increase over time.
However, to be sure that you’re getting a good deal and that you’re buying at the right time, you need to have a decent understanding of the housing market and any economic context that could influence the market and whether the housing market is currently depressed or high.
Moreover, it’s also possible for rent to be high. At the same time, house prices are low, so if the cost of monthly mortgage payments is currently less than the cost of rent payments per month, this is a strong argument for buying rather than renting if you decide between the two.
Conversely, if rent is low and house prices are inflated, then it might be a better idea to rent until house prices depress again if you want to increase your chances of making the best investment long-term and save money on your home in the short term.