Buying a house is a big step in anyone’s life. But is it always the right step?
Home ownership, and the responsibility that comes with it, definitely isn’t for everyone. Below are some pros and cons, and questions you should ask yourself before you consider making a commitment to owning your own home.
- It’s a big up-front cost
Evidently you knew this one. Even with the 5% deposit Help-to-Buy scheme, you still need a decent sized deposit in order to make your monthly mortgage payments affordable. As well as a deposit, you also need to take into account at least £2k worth of legal fees, survey costs and tax.
Question: Would you rather transfer large chunks of your income and any spare money you have into a savings account religiously for several years, or have 2 amazing holidays each year and be able to spend your spare money on clothes and gadgets?
- It’s a lengthy, stressful process
I wrote a blog post about lessons I learned from the process of buying our home. The search and selection of your dream home is just the beginning; you then have weeks of stress wondering if someone will ‘gazump‘ you, followed by months of painfully slow surveys, contracts and piles of paperwork. This process can take anywhere between 8 weeks and 12 months. Ours took 3 months, and it basically took over my Summer.
Question: Are you willing to give up large amounts of your time for possibly months on end, wading through paperwork and legal contracts?
- It’s a continual expense
Obviously you’ll have your mortgage and bills to pay, but you should also take into account that you are responsible for the maintenance of your property. If you’re buying a flat within a managed building, your responsibility will be limited, but it’s likely you’ll still have to deal with dodgy plumbing or damp problems within your domain. If you’re buying a house, you’ll have to stay on top of the upkeep of exterior walls, the roof, the attic, plumbing, electrics, windows and drains yourself. There isn’t a landlord that will cover the costs for you anymore.
Question: Are you financially able to dedicate part of your monthly income to an emergency maintenance savings account? Are you willing to spend the occasional weekend fixing/painting/maintaining really boring things?
- It’s one of the most serious, legally binding contracts you can get
Buying a house and getting a mortgage signifies some pretty heavy commitment to the location you’re choosing. You have to really love that house and know that it will suit you for several years, and like the local area too! It really is a commitment, and it’s not as simple as ‘just selling it if you change your mind’. Selling a house is actually more complicated, and possibly more expensive (legal fees wise) than buying a house.
Question: Can you commit to one location for at least the next 5 years? Can you be sure that you won’t change your mind about the house or area?
- Your money is going back to YOU
Paying a mortgage to the bank isn’t like paying rent. When you pay your rent it goes into the landlord’s pocket and you never see it again, but when you pay your mortgage you are technically buying a small chunk of your house back from the bank, and that small chunk has value. Sure you’ll be paying interest on your mortgage to the bank, but it’s not nearly as much as you’d be giving away in rent, and by the end of it, you’ll own the whole house and all it’s value.
- You aren’t limited on how you can customise your place
You don’t have a tenancy agreement which tells you that you can’t make holes in the wall or paint any of the rooms. You can have pets, you can change the floors, you can add an extension, and you can make as many holes in your walls as you like! Yay!
- You’re investing in an asset & getting on the ladder
As I explained in my How I Save Money Without Budgeting blog post, investing in assets is one of the best things you can do financially. Assets increase in value over time, without you having to do anything, and (hopefully) that’s what will happen when you buy a house. You might buy it for £160k, but in 10 years if it’s worth £180k, you’ll have made £20k without lifting a finger, and you’ll be able to afford a bigger, better house the next time around.
- You don’t have a landlord lurking over your shoulder
You don’t ever have to worry about breaking the rules, being evicted, or your tenancy running out. You don’t have to have a huge panicked clear out every two months because you have a landlord inspection. You are your own landlord now.
I hope this helped you to understand whether buying a house would be the right step for you!
If you have anything to add or ask, comment below!