Realtor.com has predicted that 2017 will be a hot year for millennials in the real estate market. Millennials are beginning to reach those milestones in life that drive people to buy a home – specifically, getting married and having kids. If you’re a young adult preparing to buy your first home, here are five tips designed to help you make the process easier.
Set a budget
When shopping for a home, you need to have a realistic idea of what you can afford. Keep in mind that your monthly mortgage payment, which includes your taxes and insurance, should not exceed 25 percent of your monthly take-home pay. Take a look at this online calculator that can help you compute what your price range should be.
Don’t be afraid to ask for advice
Buying a home is a complex and stressful process – ask anyone who has done it before. In fact, you absolutely should talk about the home buying process with those who have gone before you. Talk to your parents and other family members who are homeowners about what to expect from the time you start your search up until closing day – and beyond. They may not be hip to the latest social media trends, but they can certainly tell you a thing or two about what it’s really like to buy and own your own home.
Consider more affordable markets
New York and California will always be a draw for young people, but if you want to buy a house in those places you should expect to pay a hefty premium for the privilege. If you’re looking for quality of life paired with a much lower cost of living, look to the Midwest. According to Realtor.com, many millennials will opt to buy homes in larger Midwestern markets near universities. Check out Madison, Wisconsin; Columbus, Ohio; Minneapolis, Minnesota; Omaha, Nebraska; or Des Moines, Iowa – markets that are expected to thrive. Who knows, you could not only become a homeowner, but also a trendsetter.
Don’t assume that just because you’re in your 20s, you can’t afford to buy a home. Even if you have student loan debt and haven’t been able to sock much away in savings, there are options. Look into FHA (Federal Housing Authority) loans, which allow you to buy with as little as five percent down. If you’ve been smart about handling your finances, homeownership is within your reach.
Work with a trusted professional
The Internet has made it easier than ever to search for homes and learn about how to buy a home. But that virtual experience can only go so far in the real world. When it comes time to actually begin looking at houses, negotiating an offer, and dealing with escrow, you will want a trusted real estate professional at your side. They have the experience and knowledge to help you navigate the process, and could end up saving you thousands of dollars in the long run. After all, buying a home is one of the biggest financial decisions you’ll make in your lifetime. But it’s also one of the most rewarding, and your new home will become the place where you begin to build the foundation of your adult life.