Just because you’re in your 20s doesn’t mean you’re too young to buy a house. In fact, in 2015, roughly 30 percent of all homebuyers was composed of Millennials. Wyndham Capital Mortgage is here to offer 10 things you can do to become a successful homeowner in your 20s, which is sure to make mom and dad proud…and maybe even little jealous of your ambition.
1. Hit the ‘Rents Up for Cash
Before you groan at the thought of having to ask mom and dad for money, remember it’s for a good cause. Your parents are likely to give you the shared side eye if you were to ask for money for your third smartphone in the past year. But they’re equally likely to scramble for their checkbooks if you tell them you’ll use the money for your first home…after they come to from passing out.
2. Think About Getting an FHA Loan
One of the nice things about an FHA loan is they’re a great option if you don’t have a high salary. What’s more is they allow your cosigner’s income to be taken into consideration.
3. The Low-Down-Payment Route
If you’re looking for a low-down-payment borrowing option when learning how to buy a house, consider a five-percent traditional loan. Not only will your payment likely be lower, your mortgage insurance probably will be as well.
4. Consider a Condo or Starter Home
You might have an easier time reaching your homeownership goals with a condo or starter home. This is especially true if you don’t plan on staying in your current area for long or if you’re looking at owning a home as more of an investment and less as a way to put down roots. Know that starter homes aren’t likely to be the cream of the neighborhood crop, so keep that in mind as you’re exploring your options.
5. Know Your Rights
Young hopeful homeowners might elicit more than a few furrowed brows when they tell lenders they want to buy a house. Realize that it’s illegal for anyone to discriminate against you because of your age. While you do need a work history of at least two years, your time as a student can help you qualify.
6. Don’t Listen to the Naysayers
Just as the older people in your life likely aren’t quite used to smartphones, the modern-day work environment and the fame surrounding the Kardashian family, lenders aren’t quite used to Millennial homeowners. You might run into lenders who feel you’re simply too young, unprepared and irresponsible to own a home. Show you’ve done your homework and realize the time and money required to be a homeowner.
7. Learn About the Tax Benefits of Homeownership
Besides deducting your property taxes and mortgage interest on your taxes, you’ll likely not have to worry about being taxed on the proceeds from selling your home.
8. Be Certain About Your Decision to Remain in the Area
As someone in her or his 20s, it’s expected you’ll do a lot of moving. But as someone in her or his 20s who wants to buy a home, you have to stay put in a single area for anywhere from three to five years while you recoup your initial purchase costs.
9. Prepare Yourself for the Real Joys of Homeownership
Do yourself a favor and ask your friends and family members who own homes all of the costs entailed with being a homeowner. They’re likely to tell you about property taxes, maintenance/repair costs, utilities and more. Take note of each extra cost and be sure your present and future finances are prepared for them.
10. Consider Renting Out a Room
Think about renting one (or more) of the rooms in your home to help cover the cost of your mortgage. This can be a great option if you currently have roommates.
It’s entirely possible to own a home in your 20s. Be sure you’re well-educated and prepared, and that you work with a forward-thinking lender. Interested in learning more about becoming a first time home buyer? Let us help!