If you’re a millennial looking to buy a home, congratulations! You just made an important investment opportunity that will pay off in the long run. This can seem like quite the process, but with some helpful tips and advice from professionals in the industry, anything can happen.
If you are a millennial and currently doing some research, take note of these home buying tips that will set you up for success.
Having a strong down payment lowers your interest rate and helps you pay off your mortgage even faster. A recommended amount is 10%-20%. If you’re still working on saving the money, keep pushing and be patient. According to Dave Ramsey, one fourth of millennial home buyers could not pay their down payment alone.
*Interest rate = the percentage of principal charged by the lender for the use of its money. According to Money Saving Expert, if you borrow money and the interest rate is 5% a year, it will cost you 5% of the amount borrowed to do so. This will need to be repaid along with the original money you have borrowed.
When working on paying off student loans, work towards paying more than the minimum payment or make an extra student loan payment. This might sound like a struggle, but this will help pay off debt faster. Paying off student loans is crucial when buying a home since this will most likely be the most expensive purchase you will make.
Before the search even begins, ask yourself what you can really afford. If you have no idea what that number looks like, it might be a good idea to take a home-buyer education course which will teach you how to afford, buy, and maintain a home. An important thing to remember is to not give into any temptation to stretch your dollar amount out of your price range once the search has begun. Stay patient with the process and don’t be hard one yourself in the beginning.
To become more familiar with the real estate market it is crucial to work with a real estate agent. Information about the market is easily attainable, but experience within the industry is missing. Therefore, working with an expert in this field will make the home buying experience that much more exciting.
Now that you’ve paid off your student loans, saved enough for a down payment, set a budget, and found a realtor, it’s time to consider the location of the home. Many people make the mistake of buying a home based on the house rather than the location. It is important to remember that the condition of the home can change, but the location remains the same.
Have fun with this process and take it day by day! Buying a home doesn’t happen over night.