There’s one major reason against buying your own home and that is a four-letter word:
FEAR
This fear can manifest in a number of ways:
1. Afraid you’ll have to change your lifestyle to save for a deposit
Well you will, but you can still enjoy life. Property prices may be higher these days, which means that home loans will be higher, but just by changing a few habits, you can be in a position to pay your own home off rather than pay rent to someone else which will pay off their mortgage. There will certainly be sacrifices, but leave it 10 years and you might find yourself left behind. Some of those little luxuries can be included in your budget – just not all of them. Agreeing to go out every other week instead of every week immediately halves your entertainment costs and will put an extra $100 or $200 or even more into your savings account each week.
2. Afraid you’ll never get into the market
This fear can be overcome just by taking action. You may not be able to afford your dream house at first. Or even live in the first house you buy, but home-ownership will be possible. Facing the facts and understanding how assumptions affect your situation is your first step. You may find that you can’t spend as much as you had hoped but getting professional advice and talking to a good mortgage broker or financial planner needs to be your first step in making this goal become a reality.
3. Afraid interest rates will go up
Yes, they most likely will at some time over the life of your 30-year mortgage. After all they can’t stay at all-time lows, well, for all time, can they? Your wages will likely go up too. And the value of your property will increase over time if you buy well. You have no control over interest rates and I try not to worry about what I can’t control. You can make additional payments while the rates are low if you’re able to. That will pay off in the long run – and when rates do go up, if you’re used to paying a little extra voluntarily, the impact of the rate rise won’t seem so great.
4. Afraid you’ll lose your job
This is always a possibility, but if you keep your skills up-to-date and you’re prepared to do pretty much anything between jobs just to keep some income coming in, then you’ll probably survive an employment hiatus. Good planning to make sure you have enough savings to cover at least three months loan repayments would be ideal but, failing that, your lender will often be sympathetic to a break in employment if you let them know. The last thing they want is to default on your home loan. Hopefully within a few months you are in your next job and getting back on your feet financially. There’s always a solution – you just need to look for it!
5. Afraid your relationship will break down
If this is a real fear, you should probably investigate the possibility of buying on your own. A smaller home, further out of the city or buying an investment property may be a better idea. Life is always easier if you and your partner have common goals. Finances are usually the first thing to add more stress to a precarious situation. If it’s only a new relationship and that’s what is putting doubt in your mind then you can structure the purchase so that ownership is clearly 50/50 on the title (or whatever share you have decided) and the loan can also be structured in a similar style. This can also work with friends or family members. Any relationship can deteriorate so if you make sure you enter with your eyes wide open, and you have a clear, written agreement, you will have made your first steps in the right direction.
6. Afraid you’ll need to move
Renting in a more desirable suburb is still a possibility when you are looking to enter the property market. Once you have all the information and begin looking at the possibilities you may see things differently. Living a little further away from your family and friends may end up being a good thing, and moving from the temptation of restaurants and shopping could encourage a lifestyle change that will get you to a more comfortable retirement. It may not be such a bad thing after all. Or maybe you can buy in a cheaper area and continue renting in your desired area. Just keep your mind open to options!
7. Afraid you can’t afford it
Maybe you genuinely can’t afford it yet but quite often lack of affordability comes down to lifestyle and spending habits. Now is a great time to learn how to get a grip on your finances and put plans in place to save for your home. Once you stick to your new spending plan, you’ll become more confident with your money and comfortable with the relationship you have with your money, no longer feeling like it’s a burden you have to carry. Money could be your companion to help you create a better life.
If you have an underlying fear about buying a home, work through it. Look at your options and possible solutions. Don’t let fear hold you back from achieving your goal.
I’m here if you need a voice of reason, a boost of inspiration or some good old practical help or advice.
