How To Buy A Home In Your Twenties
In the days of soaring home prices, stricter lending rules and uncertainty in the employment landscape, many young adults are being deterred from purchasing a home. Most think they’ll wait for prices to go down or for marriage, but it’s never too early (or too late – looking at you 30’ somethings) to buy your first home. Read on to find out how to buy a home in your twenties.
Before you start your homeownership journey, you should consider the pros and cons of renting vs. buying to weigh your options. If you’ve decided that you are all-in for the investment of homeownership, here are a few tips to get you there.
Build Your Credit
Buying a home in your twenties isn’t unattainable but you will need a good credit rating to back you up. You can quickly and easily check your credit by running an Equifax credit report. This will give you a good idea of where you stand and help to determine if you need to take the necessary steps to build your credit. If you do need a little help in the credit department, you can take out a credit card with a low limit to use for everyday purchases and then pay it off right away. Also, a good idea to keep a watchful eye on things like your phone bill or any loan payments as non-payment can impact your score.
Be Realistic About Your Needs & Budget
Your first home might not have all of the bells and whistles that your dream home would, but realistically you need to start somewhere. Get pre-approved for a mortgage and then stick within that budget. This may mean that you need to get a home that requires a little TLC but over time and with some sweat equity, you can turn that home into your own. Plus, making a smart decision on your first home can set you up for long-term financial success.
Save As Aggressively As You Can
With stricter lending rules now surround mortgages, you need to be sure that you approach the situation with good credit and a healthy down payment. To make this happen, be extremely strict with your money for as long as you can. Set a budget and stick to it. Put your money in an account that you can’t easily withdraw the money from and be accountable for your spending habits. You’d be surprised how much ‘little things’ people overspend on and eliminating those costs can have a profound effect on your bank account in the long run.