Home Buying Tips for Millenials
Millennials buying homes before baby boomers and others were a few years back an unheard concept. But now, most millennials are the first ones to purchase their own home, especially with mortgage rates being so low . It’s heartening to see the new generation buying their first home in their prime years.
It is an intimidating and tiring process, but is the best financial decision one could ever make. Also, with the right research and preparation, you can buy a house without much difficulty or fuss. The first step towards preparing to buy a home is to decide a budget. If you look at houses without a budget in mind, it will create problems with taking credit and so on. When I was looking for flats in Jaipur, below are some tips I followed.
So in this blog, I will go through some tips that will help millennials buy a house.
1. Before buying the house pay off every debt
The biggest challenge that a millennium faces while buying a house is their student loans and other debts. Most millennials are still paying off their loans which make buying a home a bit difficult. Also, there may be other debts like consumer debts or credit card debt. So, before you start looking at houses, make sure you pay off all the debts and loans.
If you are still in debt at the time of purchasing the property, make a budget that will help you pay the loan as well as the down payment on the house. Read more about it here.
2. Monitor your credit report
You will require a loan and mortgage to buy a house, and you won’t get it if your credit report is bad. So, check every agency responsible for maintaining the credit report to see whether your score is good or not.
If it not, ensure that you try to improve it to make your credit score healthy.
3. Start saving for down payment
Nowadays, we mostly pay for our home through loans and mortgage. But it is important that you pay at least 20% of the down payment as it lowers the rate of interest. Also, you can pay the EMI of the house a bit faster.
Even 20% is a big amount, so it is imperative that you start saving for the same. It is a struggle, but with proper planning, you can do this.
4. Find and take a pre-purchase education class for home buyers
Home buying education class is critical in helping you save money and time. They are available online, so if you don’t have such classes in your area, you can look it up online. They provide data on various types of loans and advise you about buying decision.
5. Develop a personal relationship with the seller
The housing market is seeing a decrease in sellers which means getting a good home is difficult. Every millennium is moving out and nesting, so you have to compete with them to get an affordable house.
So, when you do find a seller, make sure that you stay ahead of other buyers by:
- Pre-approve your loan before buying the house. It will give the seller a chance to see that you have sorted your financial affairs.
- Act fast; don’t keep the seller waiting for home-inspection and other processes.
6. Take help from an agent and familiarize yourself with the buying market
Buying a house for the first time is difficult especially if you no knowledge about the market. That is why it is important to get in touch with an estate agent who will familiarize you with the market. He/she can help you look at the best houses, negotiate prices and get a good interest rate on the mortgage.
7. Create a budget keeping all factors in mind
As a person who just paid his loans and found a stable job, buying a house is a big financial decision. That is why making and sticking to a budget is crucial. For that, examine all your assets and liabilities. Also, when making a budget, keep in mind all factors like property tax, insurance, maintenance cost and so on.
It is a big decision, so don’t rush into anything. Take your time, do your research and follow these tips. It will make the whole process easy and memorable.