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The importance of owning a home

Many Millennials are forgoing house ownership and choosing to travel the world instead – choosing the gypsy life rather than settling down like their forefathers. Many lifestyle trends such as van life has become increasingly popular but owning a home is still a lifelong goal for many. From the aesthetics of a good home design to the notion of having a roof over your head, owning a house has become a coveted investment. Perhaps that is why buying a home is perceived as an achievement by many people. That could also be the main reason why many Millennials are choosing not to own a house: due to its high prices. However, with proper planning, the price of a house should not be a deterrent because at the end of the day, what you will own is a home:

  1. Consult an expert before applying

A rise in income need not always translate to a proportional increase in disposable income. Unforeseen expenses occur all the time, and if you haven’t factored them in your financial plan while applying for the loan, it is only going to strain your ability to service the loan.Therefore,it would be a good ideato consult a reliable financial expertand develop a plan to repay the loan without giving up on important life goals. Some experts recommend that the debt-to-income ratio should be less than or equal to fifty percent, although in some cases, this ratio can be allowed to be higher.

  1. Speak to other people

Anyone who has ever decided to use a home loan has debated between comforts of living in an owned property via-à-vis the enormous debt that comes with acquiring it. To put this debate to rest, it would be a good idea to speak to people who have been in the same situation as you are. Especially those who are somewhat in the same financial position as you are will give you a realistic idea about the challenges to expect.

  1. Research as much as you can

Even if you are someone unfamiliar with financial definitions and terms, spend some time learning about them. Thankfully, you don’t need to step out of the house for that since the internet is plush with such information. In fact, there are free resources that can help you compare mortgage rates, check credit score and even test your ability to borrow. Certain calculators online help aspiring homeowners get a good idea about the maximum loan financial institutions could sanction them after calculating their expenses and income. It also calculates the amount that the applicant would be repaying every month. Although every bank has its policies for home loans, such free applications can help get a basic idea of the challenges ahead.

  1. Do not take the decision impulsively

It is tempting to sign the dotted line when you have finally spotted your dream home. However, buying a home requires a practical approach, not an emotional one. If purchasing this home means that you will face a severe strain on resources and won’t have anything in your emergency fund, then do not rush into this decision. It would be worth waiting for another opportunity.

 

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