You may be wondering whether it’s possible to become a homeowner in your 20s? If you’re in your 20s and one of your life’s goals is to purchase a home for yourself, then it’s absolutely possible to have a home in your 20s if you put the right plans in place.
Here, we’ll walk you through the steps to put in place before buying your first house and how to get someone who helps you buy a house. Let’s dig in!
What Are the Benefits of Buying a Home Early?
Real estate investment is one of the smartest decisions you can make as a young person. There are lots of advantages to purchasing your home at a young age. The most important advantage is you get to own a home before its value appreciates.
Of course, you must have heard your parents or older relatives wish they had bought properties decades ago when it was cheaper. The prices of properties increase as the years go by, so if you know how to buy a house at 18, for instance, you’re sure to enjoy more than twice the value in about ten years’ time.
Another reason for you to purchase your home in your 20s is because it’s a period when you’re the most financially free. In your 20s, you’re probably just out of school and working your first job. Since you don’t yet have the responsibilities of taking care of a spouse or kids, it’s financially easier to take up a capital expense like buying a house.
This decision will also help you become more financially responsible because you get to cut down on frivolous spending since you’re planning to buy a house. You also get to enjoy tax benefits when you purchase your home.
Some Things to Consider Before Buying a Home in Your 20s
It’s crucial to give lots of thought to where, how and when to purchase your first property. It’s true that on average, the prices of properties increase over the years, however there are some properties that end up being a liability in the future such as homes in swampy or otherwise unlivable areas. Hence, you need to diligently research the house you’d like to acquire before making a payment.
The following are important things to take into consideration before buying your first home:
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Research the Kind of Home You Want
The first step to take before buying your first home is to determine the kind of home you want to purchase. Since you are in your 20s, you may not yet be able to purchase your “forever home” because of the cost, but you can buy a first home that can serve you well. Plan to live in the home for at least five years to offset some of the expenses you made on the purchase.
It’s important you pick a location that’ll be convenient for commuting to and from work and other necessities you might need. Also, if you’d like to get married and have kids in the near future, then you might want to pick a property size and location that will be kid-friendly. The reason is so you won’t need to buy another house or rent a place elsewhere just after buying your house and increasing your expenses.
Get Your Finances Together
Suppose you’re thinking of buying a house at 23, then you probably already have loans like college loans breathing down your neck, so carefully plan your finances to get your first home.
Usually, you would need to make a down payment of about 20% of the home price, so get ready for that by making consistent savings or applying for down payment assistance.
Have a Good Credit Score
You need a good credit score of about 620 to apply for a mortgage. However, you can improve your credit score by paying off your debts on time, having a mixture of different credit cards and loan accounts and low balances on your credit cards.
Sometimes, there may be mistakes on your credit report and that can adversely affect your credit score so check for errors on your credit.
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Get Help to Buy Your House
You may not quite know how to buy a house from owner as there are intricacies involved in it. If you want to buy a home directly from the previous owners, also called “For Sale By Owner” or FSBO then you’re on your own during negotiations.
How do you determine the value of a property? The sellers may have some deficiencies in their home which they might get you to overlook or they might not mention them at all.
Another problem with FSBO is that you would have to pay your money deposit directly to the seller. Money deposits are usually paid at the start of negotiations to a third party who can refund it if the deal doesn’t go through. Paying to the seller can bring up issues with refunds in such cases.
To make sure you have good value for your house, someone who helps you buy a house is needed. There are experienced real estate agents that know what to look out for when getting a house and can help you bypass the hassles of trying to purchase from the owner. Ensure you work with one.
Conclusion
Acquiring property is one of the most important decisions in any person’s life. It’s important to know exactly what to look out for when you want to buy a house in your 20s.
We’ve laid out a brief guide on the benefits of buying your first home early in life and some steps to take before you purchase your house to make the process smooth for you. We also mentioned why it’s best to work with someone who helps you buy a house for a seamless home purchase.
If you follow these steps, you’re sure to make the right decision on your house choice. You’ll also have an asset that you can hold on to, or rent out to others. Whichever option you choose, you’ll continue to profit from the purchase of your house in the future.
Suppose you’re still struggling with enough funds for your first home purchase, consider getting conventional home loans at mortgage.shop to help you get started.
