Home Buying for Millennials
As a millennial myself, I always wonder why we are always the topic of conversation when it comes to businesses marketing and sales goals. The reason is simply that we are the future, and we are so “popular” because we will soon be the largest living generation, surpassing the baby boomers.
Home buying is something that research shows at the top of “Millennials’ top five financial aspirations”, yet our home buying process is different than generations in the past. According to The Financial Brand, roughly one in five Millennials the following top regrets:
- Home is costly to maintain
- Realized there was damage after moving in
- Space doesn’t work well
- Should have put down more money
So as a millennial, how do you avoid these regrets? Planning. These tips can help you during the planning process from getting your first mortgage to moving in to your first home.
- Educate yourself
First, educate yourself on the pros and cons of home ownership, and prepare yourself with the process before you dive right in. There is SO much that you need to know. These quick modules are the best way to cover just that.
- Calculate what you can afford
You don’t want regrets, right? When you are looking at your finances, don’t forget to take in to account costs such as the down payment, closing costs, moving costs, as well as keeping an emergency savings for yourself. Start by paying off your debt and saving for a down payment. Then you can determine what you are able to afford with these handy mortgage calculators based on your down payment, rate, and terms.
- Apply for a mortgage
Next, you need to be able to qualify for a mortgage loan. There are different types of mortgage loans, and different mortgage lenders, so make sure you evaluate the options and decide what is best for your financial situation. Note that your DTI (Debt to Income Ratio) and your credit score are things that mortgage lenders will look at when you apply for a mortgage. Once you are prequalified for a mortgage loan, the rate and amount they will loan you can help you gauge your price range.
- Do inspections
When you find a home that you love, don’t forget to have it inspected so that you know there isn’t damage before you move in, because at that point, the responsibility and the cost are on you. Have the inspector check out things such as when the roof was last replaced, the heating and cooling systems are up to date, examine the plumbing, and have them check for mold and pests. Also take in to account the home’s layout, neighborhood, and think long term about who will be living in your home.
- Get the timing right
That is always a tricky one. Hopefully your first home is everything you want it to be! With the housing market at a high, we never really know what will happen in the next month, year, or 5 years. So make sure the timing is right for you. The best thing you can do is save in advance and prepare yourself, and if you are reading this then you are already on your way.