I went to a mortgage advisor in the middle of January, to establish what I could and could not afford in regards to buying a house. They basically told me that if I saved the 5% deposit (which would take me approximately another six months), I would be able to purchase a place worth around $285 000. This would involve saving $850 a fortnight and then, once I'd purchased the house, paying $850 on my mortgage per fortnight.
This was doable. Just.
Basically, if I budgeted right down to the last dollar (whilst living very, very frugally), I would have been able to afford this. However, it would have meant that if anything happened, any type of emergency, even just an increase in interest rates, I would be stuck. I did not want to put myself in such a situation.
I decided that I would instead focus on paying off my car, as once that was done, I would have an extra $170 a fortnight, and this could be my wriggle room. So that is the focus at the moment. I am putting around $500 away into a high interest account and when that reaches the set amount, I will pay my car off.
Am I doing the right thing? I know that it is good to get into the property market and it is good to get in early, but I just don't think it's a good idea to be that tightly constrained, especially at my age. I obviously want to live my life a little as well.
What frustrates me, however, is that I earn a pretty good salary. It is in fact, better than almost anyone else my age that I know, significantly better. And yet I still can't afford a house? Has anyone else experienced this? Or am I missing something? Is it more affordable than I think it is?
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