We’ve got to hand it to the millennial generation; they’re an educated, tech-savvy and they know what they want. Lately, we’ve been finding many twenty-somethings in this group have decided they want to buy their first home. Why pay rent to someone else
when you could pay a mortgage for yourself?
Try these six proven tips on how to buy a home in your twenties (It’s possible):
1. Deciding You’re Ready to Commit
It’s probably been said more than once... Buying a home may be the largest purchase you’ll ever make. The point? You’ve got to know you’re ready for that type of commitment. Millennials have been deemed a nomadic bunch – so, it’s important to note most
home buyers stay in their homes for at least three to five years – so they can recoup the costs of their purchase.
Buying a home also means you’re ready to get your hands dirty – both literally and figuratively – in order to maintain your home. Handy work like replacing hardware, maintaining landscaping and even vacuuming your refrigerator coils typically falls in
a homeowner’s hands.
If you can commit to those terms, read on!
Home equity is an asset that comes from a homeowner's interest in a home. To calculate equity, subtract any outstanding loan balances from the property’s market value. Home equity can increase over time if the property value increases or the loan balance
is paid down.
Put another way, home equity is the portion of your property that you truly “own.” You certainly own your home, but if you borrowed money to buy the property, your lender also has an interest
the property until you pay off the loan.
Home equity is typically a homeowner’s most valuable asset. That asset can be used later in life, so it’s important to understand how it works and how to use it wisely.
Something you’d be interested in acquiring? To read more on what home equity is and how to build it visit: https://www.thebalance.com/what-is-home-equity-315663
3. Understanding Your Finances
When it comes time to buy a home, a lender/loan officer will consider every part of your financial picture. From your current salary, to your bills and spending habits. Since a bank is going to get all up in your spending business, you’d better do
the same. Find out how much money you’ve got coming in and going out and how much you’ll be able to devote to a monthly mortgage payment (Which is similar to a monthly rental payment, sometimes mortgage payments are less!).
When you’re considering your finances and budget, also consider the fact that homeownership fees don’t end with the monthly mortgage payment. Home owners are responsible for insurance, property taxes and any money it costs to cover routine maintenance
or unexpected home repairs.
After hearing that financial information, is buying a home in your future?
4. Considering Credit and Savings
Your first brush with credit may have been when you were inundated with credit card offers on your first day of college classes. By later in your twenties, you’ve probably established some type of credit – and, hopefully it’s decent. Lenders will
closely consider your credit score when it comes to mortgage approval. Remember – the better your credit score, the better interest rate you’ll be offered.
In addition to your credit, delve deeper into your savings. When you’re buying a home, you’ll need to have money in-hand, up-front to cover fees like your down payment and closing costs.
Have you saved the money you’ll need when it comes time to buy?
5. Find a Lender and Get Preapproved
It doesn’t take long to see that buying a home is largely a financial process, so it only makes sense that the mortgage process may be a long one, right? We’ve already let you know lenders will consider your bank statements, bills, salary, spending
habits, credit and more – but, here’s where you get to have a say. Seek out several lending institutions before you settle on the one you’d like to use.
Just like every buyer is different, so is every lender. Some may be more lenient when it comes to credit history. Some credit unions or banks you’ve used for years may offer lower rates than other lenders. The federal government also overs FHA and
VA loan options that may be good for first-time buyers.
Consider all options before choosing a mortgage lender!
6. Work with an Agent You Trust
Ah yes, the ever-important last piece of the home-buying puzzle. This is one area where we would not advise following a DIY mentality. Professional real estate agents have the training and know-how to lead any first-time home buyer to a home that’s
right for them.
Your trusted real estate agent will help you make up your “needs and wants” list when it comes to a home; they’ll help you consider your long-term goals for your new home; and, they’ll search for homes, show you homes, negotiate and walk you through
the entire offer and closing process… right down to the point where those new home keys fall into your hands.
So, answer this question… why DIY when it comes to buying a home?!
If you’re a twenty-something who’s decided that now is the right time for you to buy a home, let us help! Belle Époque Realty Services LLC, would be delighted to help you through the entire home-buying process today!