You’re a millennial—buckling under the weight of crippling student loans, beginning to pave your way into the workforce, and wondering whether becoming a homeowner is realistically in your future. Buying a home might seem far out of reach, but it doesn’t have to be. In reality, millennials take up about 36% of the home buyer pool, while 64% of those are first-time home buyers. If you’re starting to think about buying your first home, here are some tips you should consider.
Know how to budget
Millennials are generally frugal with conservative spending and investing habits. You don’t want to make the mistake of devoting too much of your savings on your dream home. Yes, it’s important to find a home you’ll love. But make sure to set a price range before beginning the searching process.
If you don’t come up with a fixed amount, you’ll risk falling in love with a home you’ll never be able to afford. In fact, coming up with a price range for your new home is the first step one should take in the home-buying process.
Prepare for the mortgage process
So you didn’t save up enough money to pay in cash? No worries; you’re in the overwhelming majority. Unfortunately this means you’ll have to find a mortgage to suit your needs, but make sure to search around for the right one. The average homeowner spends about 30% of their monthly income on housing expenses, and you’ll need to manage this for an average of 15-30 years.
It’s important to be thorough in order to set yourself up for a financially stable future. Finding the right mortgage may be a tricky process even with a good credit score. You’ll be tasked to read the fine print, compare different lenders, and do your own homework about the mortgage lending landscape. But don’t get lazy; finding an appropriate mortgage could save you thousands down the road.
Remember closing costs and home ownership fees
So you’ve found a mortgage and negotiated a successful offer. Now that the finish line is in sight, you don’t want to drop the ball. In total, buyer closing costs can total anywhere from 3% to 5% of your final purchase. Factor those costs into your budget and consider them before you start the closing negotiations.
In addition, home buyers will face moving fees and general maintenance. Many recent home buyers claim general home maintenance was much more expensive than anticipated. Do yourself a favor by factoring these in from the beginning so you’re not overwhelmed after move-in.
Use your skills
Millenials are the most technically advanced generation when compared to others that are currently taking up a large percentage of the home buyer pool. Use that to your advantage. As the first generation to grow up in a technological advanced society, millennials will be able to navigate the home buying process savily, and sellers are aware of this. In fact, web marketing alone has become a prominent trend in the housing market. Double this with millennials’ conservative spending trends and investing habits, and you’ll be well-suited to start looking for your new home. Real estate agents and sellers are tailoring their tactics for you, so don’t be afraid to go in confident!