Buying a Property: Things to Remember

[Mika]

If you are planning to buy a house for yourself, and if you are not sure whether you should buy it or not, follow this simple 5, 20, 30 40 rule.

What exactly is the rule of 5, 20, 30, and 50 in real estate?

The rule of 5: This rule implies that the house you want to buy should not cost you more than 5 times your annual salary. Let’s say your annual salary is $100,000. The house should not cost you more than $500,000.

The rule of 20: If you are financing your house through a loan, your loan term should not be more than 20 years.

The rule of 30: Your monthly house loan repayment should not exceed 30 percent of your monthly salary.

The rule of 50: Your total loan repayment including your house loan, credit card bills, auto loans, and personal loan should not exceed 50 percent of your monthly salary.

If you see your finance matching these rules, don’t attempt to buy a house.

 

[niche]

It is comparatively easy for a salaried employee or professional whose income is predictable to plan the house purchase. However, if a self employed person working at home, is planning to purchase a house, it is very difficult to predict the income, so taking a very large loan to purchase a house is risky. It better to use the savings for funding the purchase to the extent possible.

 

[Augusta]

You have made a very valuable post on how to acquire a property I always believe that acquiring a property should not let one go totally broke or begin to struggle financially.

Yes it is a good thing to have a property especially s home because it is an asset and can be used as a future collateral for any financial security so it is always good to have a property but as you rightly stated it shouldn't exceed one income if you are to buy a house it is good to budget for it and be sure that it will not drain you financially before going for it.

It is always good to find out first the cost of purchasing the assets then you budget towards buying the house this way you will be able to acquire it but not getting yourself financially depressed since you have done it with a good calculation.

 

[Sotherefore]

Ok.We also need to understand that so many people most especially civil servants have struggled throughout their life even before getting into the government job they are. They have tried to raise money and they have saved money keeping that one day they can be able to build a house for themselves. Is not really about buying a house , buying a house and building a house is almost the same thing except there is a little price differences.

Sometimes the more expensive an apartment will be the more comfortable you will be residing in such apartment and as a result I will advise that anyone that have the money to get a nice and comfortable apartment not minding how much it cost should do it because it is a lifetime purchase. . it is not something you will have to be doing it everyday. But the rules of monthly house rent still stand.

 

[Shigobad2020]

When buying a home , there are many things you need to out into consideration , first the location of the house is very important for you and your family , because you have to consider your place of work and your children education .
Secondly if you known you are not good at negotiation or looking for a good house , then you need the help of an estate agents who knows around and can give you a helping hand in acheiving your aim which is your dream house .
You need to be calm and not rush when looking for a house to buy , because you might end up getting a house that does not befits your standard when you rush into buying a house because you are desperate for a house . So you need to take your time and wait for the perfect time .
And lastly the amount of money you are earning will determine the type of house you will be buying.