Millennials are increasingly opting to buy a house in their 20s, as an investment and to get an early start on home ownership. If you have decided where you want to settle down, and if you are in your 20s keep reading to find vital tips about buying a home.
- Decide where you are comfortable and want to live for several years
- Make an aggressive plan to build your savings
- Plan to meet additional costs of home ownership
- Pick a house that fulfills your needs
- Build up credit and get a credit report
- Research housing options and get loan pre-qualifications and pre-approvals
Decide where You Want to Live
Moving around, exploring the world and shifting from one job to another is what many do in the 20s. So do not be surprised if you follow the same pattern for a period of time. But once you have stopped shifting, buying a house is something you should consider as it is a good way of investing. Often people buy houses in their 20s as they have decided to move to a particular city, feel comfortable there or have family living close by. Before buying a house, plan for staying in it for at least 3-5 years, and if you have to shift whether you will be able to rent it out.
Enhance your Savings
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Buying a home requires a down payment, and to be able to cover it you need to ramp up your savings. Saving more will allow you to cover the initial down payment easily, and also the mortgage payments that will have to be made regularly in future. To save the most take up a second job, cut out non-essential expenses and create a budget as part of an aggressive plan.
Plan to Meet Additional Costs
As you save more, plan to meet the additional costs that often arise when owning a house. Additional costs often happen in the form of unforeseen renovations and expenses that are tied to moving and setting up a house in a new location. Maintaining a house can also result in a lot of additional costs, that might remain hidden at first, and saving gives you enough of money to meet them.
Pick a House that Fulfills your Needs
Being aware of what your needs are in terms of housing is paramount. Houses that are close to your place of work for instance help you save on commute time and even on gas. As a millennial who is saving aggressively, a house that fulfills your needs and helps cut your costs, is a better option compared to one that causes you to overshoot your budget.
Build up Credit
In your 20s little or no credit will result in you struggling to get a mortgage. So before buying a house ensure that you are already shoring up your credit and have a credit card that you pay off regularly. When improving credit it is important to get a credit report, which will help you understand whether your score is below or hovering above 700. With a credit report you can focus on improving your score if it is lagging, as it helps improve your chances of a mortgage being approved.
Research Options and get Preapprovals
Doing thorough research before buying a house, results in you having the best information to make a decision. While getting pre-qualifications and preapprovals of the loan will put you on a better footing with the seller.
Buying a house in your 20s can be a rewarding experience and it can help you put down a solid foundation for investments as you grow older.