Are you a millennial thinking about buying your first home? You’re not alone. The market is filled with buyers of all ages. However, the majority of them (28%) are millennials. Also known as Gen Y, this age group is comprised of a lot of people at various stages of life as the age range falls roughly between 24 to 42 years old.
Of course, no matter your age, it’s beneficial to have a guiding hand when taking on something new, especially when it’s something as life-altering as buying a home. Below, we’ll briefly go over how to prepare to buy a house in today’s ever-shifting market and help get you on your way to home ownership.
First, there’s taking care of your financials, as getting ready for this sizable monetary investment calls for quite a bit of prep work. Before contacting a real estate agent or browsing for homes online, prospective buyers need to take steps to reduce their debt as much as possible. Doing so can improve your credit standing and secure better deal for the loan.
According to research, the most common form of debt for millennials is student loans to the tune of $35,000 per graduate on average. This kind of debt can take a while to pay, so it’s best to get serious about it sooner, rather than later.
Next is saving for a down payment. Although there are programs out there to reduce the amount needed, it’s more financially prudent to aim for at least 20% down. This also helps in setting up an affordable mortgage rate that is easier to manage when the bills start accumulating. You’ll also need to have extra to cover homebuying costs not included in the down payment, such as closing fees and moving expenses.
Once you feel confident in the amount of money you have set aside for the house, shop for a REALTOR® you can trust and who can help find you a suitable lender to get pre-approved. Pre-approval is a critical step, as it shows sellers that you’re a serious contender, which is vital in our, at-times, tumultuous housing marketplace.
Then, you can begin researching the various mortgage types and programs. There are several routes available to choose from, such as adjustable-rate, first-time homeowner, etc., all with different qualifications. Often, your lender can review these options and help pinpoint which path may be best.
These pointers just scratch the surface of what you should know before embarking on the homebuying journey. If you would like to learn more about the process, please see the accompanying resource for a handy millennial homebuyer’s guide.
Resources
https://www.nar.realtor/sites/default/files/documents/2023-home-buyers-and-sellers-generational-trends-report-03-28-2023.pdf
https://www.maxrealestateexposure.com/tips-for-millennial-home-buyers/
https://www.bankrate.com/mortgages/millennials-and-homebuying/#tips
