The thought of buying your first home can be overwhelming for just about anyone, especially for first time home buyers.
You often hear about how millennials are okay with living at home or renting smaller spaces in exchange for expensive rents. It is not at all accurate.
Millennials, are motivated to become first time home buyers more than you would think. So this is the millennial mortgage guide for millennials to learn how to go about being a first time home buyer.
1) Get prequalified
Buying a home can take as fast as a week or on the longer end 35-60 days once you find the right home. Getting prequalified a few months in advance is always a smart decision.
That gives you time to clean up your credit report if any, pay down student loans or credit card debt, and save for a down payment, closing costs, and then start checking out general areas, commute times, neighborhoods, etc.
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2) Save for a down payment (and closing costs)
First, before you even think about buying a house, save as much money as you can for a down payment.
The bigger down payment you can make and the better your credit score is, the better your mortgage terms are going to be.
Make sure to also set aside money for a closing cost. Closing costs on homes differ but can be about 2 grand one $200,000 home.
The more money you have saved to start, the less of a burden acquiring your mortgage and buying your house will be.
3) Use a Trusted Realtor
Realtors are the home buyers gate to the world. They tell you what’s available, they tell you where, and they lead you through your potential future home.
A person this important must be someone you can trust. If a realtor works on commission, it is difficult to believe that they will do their best to make sure you, a complete stranger, get exactly what you’re looking for.
Look for realtors you can believe in. You should find a well-reviewed real estate agent who can help you through the buying process so you have a better understanding of your purchase. These will be people who have sold homes to your friends and family, or have been positively reviewed by tons and tons of people on review websites.
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4) Find a House You Love
Don’t look for a house right now. Look for a house for forever. You don’t have to stay there forever, but you should plan to.
Owning a house for a short time and then trying to sell it is a hardship that should be avoided at all costs. Don’t settle.
If your gut tells you something is wrong about the house, go with it.
5) Buy the House You Can Afford
Before you sign on the dotted line, do some number crunching. That four-bedroom, one-acre land house looks beautiful. Its paint job is impeccable. But can you afford the mortgage on it? Should you invest in your 401K or save for a home downpayment? Can you even save for a downpayment?
When you’re buying your first home, you need to make sure that you only agree to what you can afford. Buying a house is signing a contract and you can’t rescind on that.
6) Get a Security System
A house is an investment. Some people forget this, but it is. You’re investing in your future. You’re investing in your life. You need to protect your investment. Now, for many people, this means a full home security system. Those are expensive but effective. However, there are other options you can choose as well. A home can be protected in many ways, and not all of them are expensive.
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There are some alternatives to expensive systems. You can protect your home in a number of ways. From dogs to reinforced door jambs, this article talks about all the ways to protect those nearest and dearest to you.
Best of luck to any millennials getting ready to become first time homeowners!
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