5 Tips for Buying a Home in Your 20s
My husband and I were 23 when we bought our home. Even though the times may have changed some in the 15 years since then, the fundamentals remain the same. If you’re a 20-something-year-old and you want to own your own home, you absolutely can. Here are 5 tips to get you on the right track.
1.Know Where You Want to Live.
After I was out of college and my husband was out of the Air Force, we decided to move back to our home state. We started a race to see who could get a job first, and he won. We moved to his hometown, which happens to be right here in St. Joseph, Missouri.
Very soon after we moved into our rental house, I knew that I would want to be here for a long time. I loved the town and its people. Plus, my husband’s large family provided an instant network of family and support.
We lived in a rental house for about a month before we started shopping for our own house. First, we went to an open house. Then, we went home and made a list of all the features we loved and hated about houses. Truly, we had the most thorough discussion about houses imaginable. By the end of the discussion, I had a very clear picture of what we were looking for.
So, while choosing your state and city is important, it’s equally important to take time thinking about all the features you need in a home. Likewise, make a list of all the features that are deal breakers.
2. Manage Your Credit Score.
Once we decided that we wanted to start shopping for a home, we started managing our credit scores. There are tons of ways to check your credit score. If you have a Discover card, they offer free credit scores. Or, you can go to a website like freecreditscore.com.
If your credit score is low, here are some quick and easy steps that you can take to raise it.
- Get a credit card.
- Charge a little bit on your card each month.
- Pay off your balance in full.
- Make sure your payment is on time.
- Look for fraud. If anything shows up on your credit report that doesn’t relate to you and what you’re doing, contact the company. Fraud happens, and it can negatively impact your credit score.
3. Manage Your Finances.
While you’re working on increasing your credit score, you can also work on managing your finances. Start looking at the amount of money you earn versus the amount of money you spend. Plan to start saving like a fiend.
Look for quick, easy ways to save money. Trim any unnecessary expenses. Create a plan to save a certain percentage of each paycheck for a home down payment and do it. If you’re still not saving what you believe to be enough money, find a side hustle.
You’re getting ready to do something big, and it’s going to take money. When you find your dream home, you don’t want the hang-up to be that you had too many iced coffees and couldn’t save enough money. Plan now, so you can be ready for the future.
4. Get Pre-Approved for a Loan.
With your credit score and your savings increasing, it’s now time to start shopping around for a loan.
It’s important to understand that just like there are banks that give you different interest rates, there are lenders and their rates differ as well. Check with several lenders to find out what they can offer you, but don’t forget that there are other types of loans.
FHA loans can be very helpful to first-time buyers. With an FHA loan, you put down 3.5% of the purchase price. This could be a sizeable reduction in the amount of money necessary for the down payment. That means that it would require less money from your savings to purchase the same home.
5. Shop Around.
Once you’re at the point where you’re pre-approved for a loan, you really know where you stand. At that point, a lender has already confirmed that they will loan you $X to buy your home. Now, it’s time for your realtor to work some magic.
When your realtor knows your price range and your must-have items, he or she can start finding homes for you to see. These homes may come in a variety of ways. They could be new construction, repossessions, homes being sold for back taxes, or just your regular old home.
In any case, it’s wise to see these homes and think about what each one has to offer. Listen to the advice from your realtor, and weigh all your options before making your final decision.
Then, before you submit a contract, check out the house at multiple times of day. You will want to get a feel for things like the neighborhood, your potential neighbors, and traffic flow before submitting an offer. Once you have found your new home, contact your realtor and submit an offer.
Here at Ramseier Realty Group, we’re ready to help. No matter what stage of the house hunting process you’re in, we’re here for you. Visit our website to learn more about our qualified realty team or give us a call at 816.262.8077.
Guest content provided by Sarah Stockett, Custom Pilates and Yoga.