Preparing to purchase a home before the clock hits 30 (years, that is) can be a major life change and something to certainly prepare for. If you’ve set your mind to buying by a certain age or at a certain time, then you’ve made a wise commitment to get ready to move into a home that you can call your own.
Preparation for any 20-something looking to purchase a home is key to being ready when the time comes. Here are some tips on preparing to buy in your twenties.
1. Be a Hardliner
If your goal is homeownership, then make the commitment now. Once you’ve made up your mind to own a home, don’t stray from that goal and most importantly prioritize your spending in the months and years leading up to putting money down. By drawing hard lines on your spending, decreasing “wants”, and saving on needs, you can easily stash a few extra thousand dollars for a down payment.
2. Use Credit, but Do it Wisely
You’ll need credit in order to get a mortgage, but being spend thrifty or using credit cards to build credit can be damaging to your overall credit depending on how you’re leveraging those liabilities. If you use your credit card as merely a means of cash flows and pay your balance ever month, great! Paying down other debt obligations including student loans, car loans, or other types of debt in a timely fashion can give boosts to your credit and help you when mortgage financing is needed.
3. Talk to a Homeowner and Listen to Realtors
If you’re seriously contemplating homeownership, sit down with some current homeowners and realtors to talk about what it’s really like to own a house. The perception often can be that homeownership is a major way to save monthly “rent” expenses, which can be true, but many young buyers fail to think about closing costs, costs to repair and replace appliances, or how to fix a leaky faucet.
Realtors can shed some light on those things but are most useful to potential buyers in describing the housing market, when to buy, and how to go about getting into your first home.
4. Start Vetting and Start Applying Soon
If you’re within a year of purchasing a home, it’s a really good idea to start examining the mortgage market, the financial and fiscal factors that drive it, and how government policies affect what you pay in taxes and interest.
The Federal Reserve Board governs interest rates and their decisions to raise or lower interest rates often have a positive correlation to mortgage rates. Closely monitor the Fed’s activities and know where mortgage rates are headed. Also, start applying for financing now. You’ll want to have all of your paperwork out of the way when it comes time to start shopping around. Additionally, you’ll know what you’re approved for and can work within the confines of that budget.
5. Find a Mortgage Solution that Works for You
Mortgages are as individual as the homes and the people they’re financing, so finding the right solution for you is highly important. The experts at Tidewater Mortgage Services can lead you in the right direction. Calling a mortgage loan officer can get you pre-qualified the same day which means you can start shopping for a home that meets your needs and budget. Remember, starting early and locking in a great interest rate can make a huge difference down the road call Tidewater Mortgage Services today!
