Should I Buy a Home? Three Key Factors to Consider

Recently, a friend of mine had the opportunity to select a unit at a new property launch. At the venue, he turned to his family for advice. Some urged him to go ahead with the purchase, while others questioned the need to rush, leaving him conflicted. After much deliberation, he ultimately decided to go through with the purchase.

Good-quality, affordable properties are often highly competitive—hesitate for a moment, and someone else might snatch them up. But beyond location and quality, how should we decide whether buying a property is the right move?

The most important factor is affordability. Before deciding to buy, assess whether your income is sufficient to cover the mortgage. Consider whether your job and income are stable. If your income fluctuates, banks may require additional documents, which could delay your mortgage application—or, in the worst case, result in rejection. 

Mortgage payments are a long-term commitment, often spanning up to 30 years. Before entering the market, evaluate your ability to sustain payments over the long run. Banks typically require that your monthly mortgage payment not exceed 50% of your monthly income. If you anticipate financial strain, consider opting for a more affordable property. 

Additionally, think about whether you can still manage payments in emergencies. Do you have enough savings to cover mortgage payments in case of job loss? It’s generally recommended to have at least six months’ worth of savings as a safety net to ensure you can continue payments until you find new employment. 

Next, it’s essential to consider your future living needs. For example, do you plan to get married in the next 10 years? Are you thinking about having children? These life events will directly impact the type and size of home you’ll need. 

If starting a family is in your plans but your current budget doesn’t allow for a spacious home, renting might be a better solution to meet your immediate needs. Keep in mind, though, that renting comes with its own challenges, such as the possibility of rent increases or lease terminations, which could require time and money to relocate. 

Finally, keeping an eye on market trends is crucial. If the property market is on an upward trend, prices may continue to rise, and waiting too long could mean paying more for your desired unit. On the other hand, if the market is declining, there’s a risk that your property could become a negative-equity asset. 

The economic environment also impacts mortgage affordability. When interest rates are low, mortgage payments are more manageable. However, rising interest rates can increase monthly payments, placing greater financial pressure on households. Since mortgages are a long-term commitment, it’s essential to assess whether you can handle the potential financial and psychological stress.

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