Millennials: Are you ready to buy a home?
The millennial generation; they’re an educated, tech-savvy bunch that typically knows what they want. Lately, we’ve been finding that many twenty-somethings in this group have decided that they want to buy their first home. Now, there are apps on just about everything out there, but swiping right isn’t going to get you into your first home.
Instead, try these tips on how to prepare to buy a home:
- Be Ready to Commit
Buying a home may be the largest purchase you’ll make in your entire life. You need to know for sure that you’re ready for that type of commitment. Millennials have been deemed as a bunch who moves around often – so, it’s important to note that most home buyers stay in their homes for at least three to five years – and, that’s just 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 smoke alarm batteries, maintaining landscaping and even changing air filters typically falls in a homeowner’s hands, as well as any other home repair or renovation needed.
If you can commit to all of the above then, read on!
- Know and Understand Your Finances
When it comes time to buy a home, a lender will consider every part of your financial picture and help you through the lending process. From your current salary to your bills and spending habits to any money you have received from family. Since a bank is going to get all up in your spending business, you’d better do the same and watch this closely. 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 every month.
When you are considering your finances and budget, also consider the fact that homeownership fees don’t end with the monthly mortgage payment, there is always more. Home owners are responsible for insurance, property taxes and any money it costs to cover routine maintenance or unexpected home repairs…anything can come up when you own a home.
Are you financially ready?
- Don’t Forget about 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 or right after high school. By later in your twenties, you’ve probably established some type of credit – and, hopefully it’s at least decent- even if just to buy gas every month and pay off. Lenders will closely consider your credit score when it comes to mortgage approval and what you can afford. Remember – the better your credit card score, the better interest rate you’ll be offered with your mortgage. It is important to know where you stand and if no credit established, better to start now.
In addition to your credit, what do you have in 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 associated with buying a home. Your lender can tell you more about specific amount needed, but get that savings account ready.
Have you saved the money you’ll need when it comes time to buy or do you need more time?
- Find a Lender and Get Pre-Approved
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, so be prepared. We’ve already let you know that lenders will consider your bank statements, bills, salary, spending habits, credit and more – but, here’s where you get to have a say when it comes to this process. Seek out several lending institutions before you settle on the one you’d like to use….we can help provide a list of preferred lenders we work with. Some even have first time homebuyer programs and possible discounts.
Every lender is different, 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, so good to check into those as well. The federal government also offers FHA and VA loan options that may be good for first-time buyers….ask the lender about all options available to you.
Think through all options before choosing a mortgage lender. One who will be with you throughout the entire process, one that can be long and at times seem frustrating. A good lender will walk you through it to help make it the best experience that it can be.
- Pick an Agent that you Trust
This is one area where we would not advise following a DIY mentality and trying to find or purchase a home without an agent. 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.
If you’re a twenty-something (or any age!) who’s decided that now is the right time for you to buy a home, let us help! We will be happy to help you through the entire home-buying process today! No matter your age, the home buying process should be memorable and as smooth as possible…The Marr Team can help make that happen!