8 Tips First-time Homebuyers In Their 20s Need To Consider
Published June 21, 2017
If you are in your 20’s and looking to buy a new home for the first time, then there is some important information that you will need in order to avoid making mistakes that can cost you a lot of money.
So you are a young successful twenty something who is looking to make the plunge into the somewhat scary world of home ownership. While this can often be a complicated and precarious process, there are a number of simple tips that you can follow to achieve success.
1. Understand Your Goals
It is very important that you evaluate what you want for your life, the lives of your family if you have one, and your future in the home you will be purchasing. Different properties will have varying characteristics that will make them more or less suitable to your goals. If you are planning on living there for a long time, you have to focus more on the functional aspects of the building and its location. That will have a direct impact on the quality of the time that you spend there.
Another common reason to purchase a home is as an investment property. Real estate is one of the oldest and most long-term successful investments that can be made. However some properties will increase in value more or faster than others. To evaluate this you need to look at the construction of the building, the style and amenities found within it, and the neighborhood that surrounds it, in order to make an informed guess as to how much the value will increase over time.
2. Prepare For The Mortgage Application Process
The cost of a new home will vary based on a variety of factors, including the terms of the loan that you are able to get in order to handle the purchase and long term payment of the cost associated with such a large ticket item. If your mortgage has a higher interest rate, or less favorable terms, then you will end up paying more per month, and over the long term, making the house simply more expensive.
One of the first things that you should do is check your credit score to determine exactly how lending institutions judge you as a risk for receiving and paying back a mortgage. If you have old unpaid bills, outstanding balances, or a history of paying late, then your credit score may be quite low, making it hard for you to get a lending institution to take you seriously. Unfortunately it can take a very long time to repair a poor credit score, and it may require several years of purchasing smaller items with credit then paying those bills back early or on time.
3. Control Your Emotions
There is a lot of stress that can come from purchasing your first home. Not only is a lot of money being spent, but you are also choosing the place where you will be spending a significant portion of your life. However you need to remain calm and use strict logic when making a decision. You should know exactly how much you can afford and be willing to turn down even a dream home if it is out of your budget. You should also have a list of vital amenities and features - ranked in order of importance - so that you don’t let a pretty exterior or cleverly staged rooms distract you from what you are really looking for in your new home.
4. Consider All Of The Costs
The price of a new home is always more than simply the price of the home. You also have to pay a host of fees to the lending institution, surveyors, administrative assistants, legal offices, and in the form of taxes on almost every transaction and piece of paper work involved. Beyond that you also have to consider the monthly cost of utilities, as well as the price of repairs, both major and minor, that will have to be undertaken to maintain the property over time.
5. Evaluate The Neighborhood
Your home is more than just four walls and everything within them. It is also part of a neighborhood that will affect how you live on a daily basis. You should evaluate the area around a potential purchase for fee, as well as visual appeal. A great view can exponentially increase the quality of a home, and – conversely – a poor view that is obstructed by trees or neighbors that do not keep up their yards can decrease the value over time. At the same time, good schools are important for people who are planning to have children in the near future.
6. The Down Payment
The initial amount that has to be paid in order to secure the mortgage and close on a home may be quite significant. It is important not to go overboard, spending more than you comfortably can and putting yourself in debt before you even move in. Some people will borrow money from relatives or apply for government assistance to help with these costs. Another responsible idea is to open a savings account ahead of time and start building a nest egg that is specifically for an eventual down payment on a home.
You can often get a deal on a great home in an amazing location if there is some damage that needs to be repaired. This can be ideal for people looking to save money, but it should be balanced against the hassle of having work done on your new home before you can even move in, which can make the process complicated. There can also be hidden incidental costs that come up during the repair process that may be unexpected.
8. Finding a Quality Real Estate Agent
It’s very difficult to sell a home by yourself so you will most likely need to retain the services of a qualified real estate agent. They can help get the word out about the property, while also handling the paperwork and legal processes that can otherwise be an entangling mess. Look for a realtor that has a proven track record and that works often in the neighborhoods you are considering purchasing a home in.
Purchasing a home in your 20’s does not have to be difficult; in fact, it can be quite fun if you take the time to consider your options carefully and make a home selection that will serve you well both now and on into the future.