How to Buy a Home in your 20's

The “How To” guide for buying a home in your 20’s

When you think “millennial generation”, you think educated, tech-savvy and fairly decisive.
Furthermore, this generation is seeming to be a group deciding that their 20’s - early 30’s is
the prime time to buy their first home.

In today’s world, there are TONS of resources through the internet on just about any subject
you are researching, but sometimes, the “click and glance” method isn’t the smartest way to
get your into your first home --
Instead, give these five tried and true tips a shot and feel confident on how to buy your first

1. Are you ready for the commitment
It has been said time and time again, buying a home is arguably the largest purchase you
will make in your entire life.  What does this mean? You should be confident that you are
ready for that type of commitment. If you are the “Instant gratification” type but have a
tendency to tire of things easily, it is important to know that there is a time-frame to recoup
the cost of your purchase regardless of the market trends. In that case, you can expect to
stay in this home for 3-5 years to gain equity and avoid unnecessary expenses.
Buying a home also means you’re ready for the responsibility of upkeep. to maintain your
home. Some typical homeowner’s responsibilities include things such as, replacing smoke
alarm batteries, maintaining landscaping and changing air filters in your heating/cooling

2. Knowing your finances
When the time comes, you should meet with a lender to begin the prequalification process
for obtaining a loan. The lending institution will consider all aspects of your finances
including your salary, bills, spending habits and debt to income ratio. The bank will require
this information, so this should serve as a motivator to focus on your finances. Evaluate
what you have coming in and what you are spending and realistically consider how much
you have to devote to a monthly mortgage payment.
In your budgeting, you should also consider that owning a home is associated with
miscellaneous fees such as homeowners insurance, property taxes, Homeowners
Association fees (if applicable) and an emergency fund to cover routine maintenance or
unexpected home repairs.

3. Consider Credit and Savings

By your mid-twenties, it is safe to say that you have probably established some form of
credit and hopefully it’s good credit. Lenders do closely consider your credit score in the
mortgage approval process. How does your credit score affect your loan? The rule of thumb
for this is, a better interest rate is a reflection of a higher credit score.
In preparation for buying a home, your savings should also be of consideration.  Money in
hand is necessary to cover things such as earnest money deposits, down-payment and
closing costs.

4. Start the Pre-approval process
I am sure you have gathered by this point, a huge part of purchasing a home is a financial
process. This means most of the home buying process is based on the time it takes to

obtain a mortgage. As you know, lenders will consider your bank statements, bills, salary,
spending habits, credit and additional criteria, but it is extremely smart to speak with
multiple banks before settling on the institution you work with.
In the same way that no two buyers are the same, neither are lenders. Some may vary on
credit requirement and be more forgiving when it comes to credit history. Some credit
unions where you have established membership may offer lower rates than non-member
institutions. The federal government also overs FHA and VA loans that may be great
options for first-time home buyers.

5. Work with an Agent You Trust
The final thing to consider in the home-buying process is hiring a real estate agent that you
trust. Better to have professional knowledge and representation than trying to maneuver
through the process blind. Real estate agents have the training and resources to lead first
time home buyers to the perfect home for them! From the initial stages of developing your
“must-haves” list to realizing your long-term goals for your first purchase, they provide input
based on experience to ensure you are comfortable with your decision. They will perform
home searches, guide you through showings and assist with offering on a home. They will
negotiate a contract for you and walk you through the entire closing process. When it comes
to the home buying process the DIY way is not the smartest way. If you decide the time is
right to buy a home contact an experienced real estate group to help you through the entire
home buying process from start to finish!

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