If you’re young and working, you don’t have to wait until you’re in a permanent relationship before you buy your first home.
That’s the advice of Shaun Rademeyer, CEO of BetterLife Home Loans, SA’s biggest mortgage originator, who says young people often argue that they are not sure they will stay long in the same area or the same job, and that the flat or house they buy may not suit a future partner.
“But we believe Millennials should be aiming to buy a property of their own as soon as possible. After all, you don’t wait to find the perfect partner before you buy a new car or furniture, or before you decide to take an overseas holiday. And the sooner you stop spending your hard-earned money on rent – which generates no return for you and buys you no asset - the better.”
Indeed, he says, the main aim for young buyers should be to get a foothold in the property market, almost irrespective of the state of the market or the economy at the time. "Home prices keep rising – in fact they have continued to rise even in the super-slow economy of the past two years - and the longer you wait the more difficult it becomes to afford that first home.”
Rademeyer says the other positive reasons that drive young couples to buy a home should also drive young singles. These include:
As for what type of property to buy, he says many young buyers find the transition to home ownership easier if they buy an apartment or a townhouse. “Such units usually require less upkeep than freehold homes, and come with built-in neighbours as well as extra facilities in many cases, such as a pool, gym, entertainment area and even a laundry or a tennis court. Of course they are also usually much less expensive than freehold homes.”
This is important, Rademeyer says, because young people should only buy properties that they can comfortably afford. “And the calculation of how much they can afford to repay on a home loan must be done very carefully, and must take into account any other financial commitments they have as well as the ongoing costs of home ownership, to ensure that they will not be over-extended financially.
“Otherwise the property is likely to become a burden rather than a pleasure, and they could even end up in a foreclosure situation that would leave a black mark on their credit record and makes any future loan application or property purchase very difficult." Consequently, he says, obtaining mortgage pre-approval through a reputable mortgage originator such as BetterLife Home Loans is an excellent first move, which should be followed by the selection of a qualified, experienced estate agent to help find exactly the right type and size of property."
Article from privateproperty