Adulting is never easy. Becoming a First-Time Home Buyer can be easy. Turning your temp job into a career, investing your money, and navigating life like a boss is a lot to handle for the modern millennial. But one thing they do dominate is the housing market. As a whole, millennials accounted for 37% of homebuyers in the last year – making them the most active generation in the market for six years running. Of course, most millennials are first-time homebuyers and completely new to the intimidating world of mortgages, loans, and interest rates. They also bring different considerations that previous generations didn’t, such as student debt.
To account for these unique needs, they need millennial-specific advice. Find our best tips for buying their first home below!
- Get Your Finances In Order First
Finding the right property is often the easiest part of the process, and the best way to prepare for your search is by getting a grasp on your financial situation. Knowing which types of financing you can take advantage of will put you in the best position when you start looking into the market, and it’s particularly important for younger buyers who may not have a significant credit history.
On top of good credit, think about the other debts you may have. For instance, planning for monthly mortgage plus monthly student loans may drive your savings through the bottom of the well. Either plan for a highly sustainably monthly budget now, or if things look a little off, consider an extra year to load up your savings.
It’s best to seek lender recommendations from your realtor since large banks often carry restrictions that won’t give you the best financing options to get an edge over the competition. Remember that it’s never too early to speak with a lender, particularly if there are some hiccups in your financial history you’ll need to clear up.
- Don’t Settle
Always trust your instincts – buying a home is a huge investment and you will want to enjoy it for years to come. If you’re not in love with the place, or something just feels a bit off, skip it and move on. Finding “the one” shouldn’t be rushed! One strategy that’s particularly helpful with couples in the homebuying process is writing out a (realistic) list of must-haves they need in their future home. This way, the buyers have taken the time to think about what they want and will feel peace of mind when they find a house that ticks all their boxes.
- Think Long-Term
While a hip downtown condo might feel like a great option for your first home, think long and hard about what your investment will look like in five and ten years’ time. Where do you see your career taking you? What kind of appreciation does the area offer? If you think a single-family is too intimidating, try looking into smaller townhomes or attached duplexes. The bigger the property, the broader the pool of buyers you’ll be dealing with in the future.
The most important thing about thinking long-term is being aware of future outcomes that could help your current decisions today. A good starting point is to anticipate options that are priced at three to five percent of your overall annual income.
- Find the Right Real Estate Agent
While shopping around for a home can sound exciting, this can also present some ongoing obstacles and lots of new information that you might have to think about. The stress of new challenges from early research or getting the process started may drag you down to fatigue. Consistent fatigue can easily decrease decision-making and your overall productivity.
So, don’t be afraid to seek help! Realtors are in business because of what they do and are very insightful throughout every step of the way. Get some recommendations from your friends and family. Although if want to find one yourself, the internet is the best place to find local realtors that are at the top of their game.
Although millennials may be facing some current struggles with getting their foot in the housing market, it’s good to know that planning ahead for home-buying always increases your chances of getting there. Preparations may take time – a perfectly normal step for any big purchase!
Special thanks to our guest blogger Hannah Stevens for the article.
The Richard Woodward Team of Service First Mortgage has many First-Time Home Buyer programs for you.
From zero down to down payment assistance, we can help you make an informed decision with our expertise, knowledge, and technology.