1. Budget correctly
Is buying your own home cheaper than renting? If your calculation is based on today’s low interest rates, then yes, you might think so. But a word of caution: under current guidelines, a mortgage must also be affordable at imputed interest rates of five percent. Longer-term expenditures on real estate, such as ancillary costs, maintenance, renovations and mortgage payments, are often underestimated. The best way to work out what you can afford is with a mortgage calculator.
2. Plan in reserves
When buying property that’s not yet built, you usually have to make down payments and finance preliminary work. It’s important not to forget that the sales documents are based on ideal scenarios. Problems during building work, incorrect budgeting and delays are often left out of consideration. This is why you should factor in a contingency fund in the form of equity. And the savings you can make at the moment thanks to the very low mortgage rates should ideally be set aside in something like a fund savings plan, for instance to pay for unforeseen damage to the house, or as the first tranche of money needed for future renovations.
3. Clear the biggest hurdle