Hello, Millennials! This is Kacey and Gerald Peace and we want to help you buy your dream home. We know that members of the Millennial generation, those in the 18-34 age range, have been slow to enter the home buying market confirms the National Association of Realtors. There are student loan debts, high unemployment rates, tight credit and a different view on home ownership to think about. Most millennials prefer renting to buying a house but slowly, there are those who are becoming more inclined to buy their dream home. What are some important things to consider for millennial homebuyers? Read on to find out!
1. Credit score is key
Real estate is expensive and investing is not something that is done haphazardly. One of the biggest steps in buying a home is getting a good credit score from a lender. Redfin says that fortunately when it comes to hard money loans, your credit score isn’t as important as it may be if you were applying for a traditional loan. Hard money lenders are those that look at the property value before giving a loan. For traditional loans, having debts paid off will earn a solid credit score that you can use to secure investment money.
2. Research, research, research!
Research the property you are targeting to buy. Research your price range and check out online what properties fall into your budget before going out to see them in person. Research the neighborhood and the real estate market in the city you’re interested in to see if the price of the house you want is a good price or if you’re being stiffed. Research public transportation, shops, schools, crime rate, fault lines, and other important factors.
3. Find out all the costs involved
Forbes states that you don’t just consider a home’s price—owning real estate means factoring in insurance, closing costs, homeowner’s fees, home maintenance, utility payments and other numbers that can quickly add up. Getting your dream home means getting to know the hidden fees that may wreak havoc on your budget. You should have a realistic idea of what you can afford and look not just at the price of the house but the whole package. Ask lots of questions and learn as much as you can about the house you want before making any decisions.
4. Choose a big downpayment.
The minimum amount you’ll want to consider putting down is 20% in order to avoid paying private mortgage insurance cautions Forbes. Remember that the bigger the down payment made, the less of a risk you are to lenders. This may lead to a bigger loan and you’ll be able to afford a wider range of houses. Plus, a bigger down payment means there will be less to pay off down the road.
5. Save, save, save!
Having proof of savings will not only impress a lender but will help in adding to your house-buying budget. Successful investors start saving a certain amount from each paycheck that stays tucked away until their first purchase shares Redfin. Be sure to invest for the future, since buying a house is a big chunk of your savings gone, make sure to keep some emergency and daily expenses funds. Another wise move would be to buy smart, buy only what you need and not what is the hype.
6. Get a great realtor
Start networking and consult an expert or experts. It is so, so important to work as a team with a skilled local lender and a well-connected, experienced Realtor reminds HomeCity. Get online and see who are the top realtors in the area you’re interested in and contact a few of them. Meet with them and discuss what you’re looking for and pick the one who has the same point of view as you do. It is better to have the help of someone who knows the ins and outs of the real estate market when you’re buying your first home.
7. Follow your heart AND mind
This will be YOUR home. The place you will spend most of your days in. Don’t doubt yourself when choosing from a list of houses that your realtor will give. They will all surely fit your budget and lifestyle since you discussed those details, what you need to decide for yourself is what house will be your HOME.
8. Choose wisely
I know we said to follow your heart and mind but it’s too easy to base your decisions on your heart instead of your head, especially when it comes to real estate. A perfect looking house from the outside may need tons of repair on the inside. Get an inspector to help decide how much you will need to spend on the maintenance and repairs. ask your realtor’s advice on the best one for you, most likely these answers will be helpful in making that leap from renter to owner.
Inman says that according to Forbes Magazine, Millennials currently account for about a third of all recent new home purchases; their impact on the market is only expected to skyrocket in the next decade, reaching a tipping point in 2018. I hope future millennial homebuyer will see these tips as helpful. If you have any questions that we didn’t cover in this post, feel free to leave a comment below or to contact Gerald or Kacey. Here’s to buying your dream home!