7 Tips For Millennial Home Buyers
You have probably seen the word “Millennial” popping up all over the place. It seems like everyone is trying to predict what this next generation is going to do. From home buying, to jobs, to saving for retirement, to when they are getting married, to when they are having children, everyone is weighing in with their opinions on what this generation is currently doing and should be doing and the focus comes with good reason.
Millennials were born between the early 1980s and 2000s, meaning they are currently 35 years old and younger. Most Millennials grew up with the Internet. They have a mentality of researching online before even picking up the phone to reach out to a real estate agent. Because of this, many of them overlook the value an agent adds to a transaction.
One of the best tips for millennial home buyers is to have a long term view of home ownership. There will always be ups and downs in the market. If you are in a good financial position and avoid home buying mistakes, riding out the ups and downs should not be that difficult. While deciding between renting or buying right now may seem like a big dilemma, but years down the road you will probably be glad you chose the dream of home ownership.
Here are some considerations for you as you think about home ownership:-
- Trustworthy Realtor:- A Realtor is your greatest advocate in the home buying process. Not only he will help you identify the best type of home for you to buy, but will also help you in finding locations, neighbourhoods and eventually to the very best listings for you to consider. Realtors have a large network of resources who are there to help you with all the related aspects of buying your home.
- Build Savings:- If you are thinking of buying a home, growing your savings is key to financial responsibility. Try taking a percentage out of each paycheck you receive to put aside in your savings account. Even if you save only 2% of your income, a small amount can add up over the time.
- Budget for Closing Cost:- In addition to saving for a down payment, you’ll need to budget for the money required for closing, which can be significant. Closing costs generally run between 2% and 5% of your loan amount. You can shop around and compare prices for certain closing expenses, such as homeowners insurance, home inspections and title searches.
- Get a Pre-Approval Letter:- As you get closer to buying a home, it’s smart to get a pre-approval, where the lender thoroughly examines your finances and confirms in writing how much he is willing to lend you and at what terms. Having a pre-approval letter in hand makes you look much more serious to a seller and can give you an upper hand over buyers who haven’t taken this step.
- Credit Score:- A bad credit score could negatively impact your chances of a home loan, but there are plenty of actions you can take to stay on top of it, such as checking your credit report for mistakes and properly managing your credit score. Good credit is ranked between 661 and 780, and excellent credit is between 781 and 850, though lenders have their own criteria for what defines bad, fair, good or excellent credit.
- Identify Location:- Now that you’ve got a budget, a pre-approval letter and a realtor, it’s time to sit down and decide on a location. Do you want to be near to family, school, work or somewhere near to workplace? Location is extremely important especially when thinking about the future and potential resale, school for future kids or amenities etc...
- Cost of Home Ownership:- Before purchasing your first home, it is important to keep in mind the ongoing costs of owning a home. Along with the transactional costs in purchasing a home, your home will require ongoing maintenance which will be an investment of both time and money. If you finally have your dream home, you will always want to maintain it so that it holds its value for years to come!
Another great tip for millennial home buyers is to take your time. It takes a lot of courage to make this kind of decision. Once you have taken the leap and decided to buy a house it can really put the wind in your sails. You need to do your research and need to choose wisely. Taking your time to learn all about the home buying process will allow you to make knowledgeable decisions.
Author : Gunjan Johar | Real Estate Analyst & Home Decor Blogger