Whether you’re a first-time house buyer taking your first tentative step to the property ladder or an old hand seeking the perfect home for your retirement home, the same golden rule applies where you need to achieve the right balance between affordability, suitability and suitability.
As a rule of thumb, traditional mortgage lending principles allows borrowing up to three times your gross annual income. Couples can generally borrow up to three times their joint salary, and this can allow you to borrow more, but there is no point buying a house of your dreams if the mortgage is going to turn into a financial nightmare.
Your repayments should not be more than 35% – 40% of your net monthly income. By using free mortgage affordability calculator available online, it can work out the monthly cost of your home loan and tell you if you are in danger of borrowing too much.
After working out your affordability level as well as the gross costs for renovations, you need to find out whether the type of property you want is available in the area that you want it. It’s likely that you have to reconcile on some of your wants and dislikes, so be prepared to compromise. The best way to conduct your search is to go on all fronts using means such as real estate agents, property classifieds as well as online searches. Online property portals, which indexes and lists most properties for sale oftentimes include local details and a map plot.
When you have satisfied both the affordability and the availability components of the property you want, there are still several factors you must also consider balancing between feasibility and your wants:-
- Accessibility: Are your friends and family nearby, and is the location convenient for you to travel to work?
- Facilities: Are there any nearby amenities and do you have enough parking facilities for your vehicles?
- Noise: Will you have juggernauts wrestling past your bedroom at wee hours?
- Space: Will the property you are eyeing for have enough space for the family to grow?
- Crime: Is it gated and guarded? What is the crime rate within the neighbourhood?
A PIN ON THE MAP
There are various factors that can affect your choice of a residential property but a good address should be the top of your consideration list because while you can improve a property, you cannot move it.
Think not about the attractiveness of the neighbourhood, but how it may also change in the future, such as social and economic value.
Property prices could easily be affected by:-
- -New developments: If developers are building a project in the area, it is probably a good sign the location is becoming more popular. However common sense applies, where a chicken farm does not have the same appeal as a fine dining restaurant.
- -Transport links: A new rail station, as well as roads, may mean easier access to the city centre and they can have a huge effect on the value of a property.
- -Amenities: New restaurants and luxury leisure centres can be a good indicator of the direction in which an area is heading. Trendy shops add appeal to the area while shabby shops detract from it.