Buying your own house is the ultimate American Dream. Most people think about owning a house after they are 40 to 50 years old. But buying a home in their 20s is something that not many dream of.
Are you curious about how you can buy a house when you are in your 20s?
You may be dubious about the prospects of success about this, and rightly so.
Between college loans, entry level salaries, and the desire to have fun, buying a home seems like a far-fetched dream— something far beyond your reach.
What if we tell you that it is entirely possible to buy a home in your 20s?
Yes, you read that right!
Not only is it possible, but it will also benefit you a lot down the road.
Here is what you can do to make your home-owning dream a reality right.
Decide and Commit to it – Personally and Financially
Buying your own house is the biggest purchase you will ever make in your life. You are not going to get it unless you are totally committed to it. Prepare to get your hands dirty, literally and figuratively. The first thing you need to do once you have decided to own a house is save for a down payment. You need to have some cash to buy a house at your age. You will need money to pay for the down payment on your mortgage. That’s a lot of cash.
You need to be prepared to make this big investment. Mortgage lenders will take a look at your financial position before approving your mortgage. Thus, you need to have everything prepared, from your spending habits to your salary slip, your bill payments and any other source of income you may have. You may also need to save aggressively for at least 6-12 months.
With a clear picture of the financial requirements, you will be able to plan for it in a better way.
Purchase a Starter Home
You need to understand that you are a young home buyer and that you don’t have to find your “forever home” right now when you are making your first property purchase. It is your first home but not the last. Thus, it is best to buy a starter home as your first purchase. This will keep your mortgage payment within your range and allow you to get a 5-7 years adjustable mortgage rate, which will make you eligible for a lower interest rate. Don’t buy a home that you cannot afford.
Keep a Rainy-Day Fund
Millennials tend to be less financially responsible than the older generations. Most of them overspend and fall short on savings. It is important for millennial home buyers to have a rainy-day fund in case they need emergency home repairs. Unless you are buying a newly constructed property, you will need to keep some money aside for repairs you may need in your new house.
With these simple tips, you may be able to purchase your first property right in your 20s.