National Homeownership Month: Tips for Younger Buyers

As a young person, you may wonder whether planning to buy a house is an out-of-reach dream. After all, home buying was a priority for the longest time for older people, especially those with families. However, as time passes, you may have noticed that many young people are buying homes. How do they do it? It’s not as complicated as most people assume. While the process can seem overwhelming, you can feel overwhelmed if others do it. Here are a few tips to help you start as a young buyer.

Save for the Downpayment

One of the biggest challenges in the home-buying process is the downpayment. You should try to have a 20% downpayment, especially if you want to avoid private mortgage insurance. But if you can’t come up with that, many lenders can still give you a mortgage even with a 5% downpayment. To help with your savings, open a separate account for the downpayment and start saving up as soon as possible. You can also ask a few loved ones, like parents or siblings, to help you calculate the downpayment.

Cut Down Your Expenses

Cutting down your expenses will help you save up for a more significant downpayment, which reduces your interest rates. If you’re yet to move out of your parent’s home, consider staying there for a while to save on rent and utilities. You can also move to a cheaper rental or get a roommate to reduce housing costs.

Another way to save on expenses is to limit takeout and cook at home. These expenses may look small, but in the end, they add up to a lot of money, which can be directed to your downpayment. You can also consider taking on a part-time job to increase your income.

Maximize Your Options in Home Hunting

When you start looking for a house, be flexible. Considering multiple options increases your chances of finding a suitable and affordable property. For instance, you can look for options in a suburban or rural area if your lifestyle allows. That’s because urban areas often have costlier homes than rural areas. In addition, look at different property sizes. A smaller house is more affordable, requires less maintenance, and has lower property taxes. Don’t forget to consult with real estate agents who can help you identify the right property based on your needs.

Make a List of Your Wants and Needs

Another way to ensure you find the right property is to analyze your needs and wants. What is the most important thing you need in a home? Remember, your first home doesn’t need to be your final home. It’s okay to make compromises, especially on the wants. Look at the most important features when buying a home. Later, when you have more money, you can get a bigger house that meets your wants and needs.

Make a Strategic Offer

When ready to make an offer, be strategic to increase your chances of success. One way to do that is by doing a Comparative Market Analysis. By understanding what similar homes have sold for, you can make a more informed decision about your offer price. In addition, you should make a competitive offer, especially in a hot market where demand is higher than supply. That said, even with a firm offer, be prepared to negotiate on price, closing costs, or other terms to reach a mutually acceptable agreement.

These are some significant tips to remember when looking to buy a home as a young person. Don’t assume you shouldn’t be thinking of buying a home because you’re young. The earlier you acquaint yourself with the process, the better.

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