Buying your First Home as a Millennial
Are you one of the some 80,000,000 in the “Millennials” generation (born in the 1980’s through the 1990’s)? Then now is the time you may be looking into buying your first home. Entering the real estate market for the first time can be confusing and overwhelming. However here are some real estate tips to help you get started!
This second part of our discussion on the Millennials focuses on 5 tips to help young adults enter the real estate market. To read part 1 click here.
1. Consider FHA loans. Since the Millennials may have the income and good financial habits to support a mortgage payment but not the down payment (many have student loans) the FHA loan program is a great place to start. In general terms, FHA loans are easier to qualify for than conventional loans. They require less money as a down payment, have less stringent credit score thresholds and are the only loan product that allow gift money towards the down payment. To find out more about FHA loans check with your lender or call Pamela with Sun Trust.
2. Research the market. Since the Millennials are comfortable using their tablets and mobile devices these are great tools to start the process of researching the real estate market, available homes for sale and the neighborhoods that have the amenities you are looking for. Of course independent personal research can only get you so far. Once you have a good sense of what you are looking for then it is time to contact a real estate agent professional to help you through the rest of the process. Download our app here and start searching now.
3. Take your time. Millennials may be used to accomplishing everything in short order. However, purchasing a home is a major financial investment and that process of finding the right home can’t be rushed along. Realistically there is no 100% perfect home. Look for the “best” home that fits your criteria and budget, not the “perfect” house. Avoid the trap of rushing to buy a home only to later regret the purchase because of things that can’t easily be changed. For example realizing you can’t live with the location, the layout that doesn’t work, or the commute that is too long.
4. Don’t rely on everyone’s opinions. When it’s time to buy your first home everyone is going to have an opinion: your peers, your coworkers, your parents, etc. Once you’ve done your personal research, started to work with a real estate professional, and met with a lender you will have a good idea as to what you are looking for in a home. While everyone close to you may have good advice to give remember that it’s you who will be living in the home, and paying the 30 year mortgage!
5. Make sure the home you are considering is a good investment. Remember to research and verify aspects of the neighborhood that you are buying into which may adversely affect resale value later. For instance, who maintains the roads? Who picks up the garbage? Some roads are privately maintained which is a headache you may not want to deal with, and may negatively affect your ability to secure a loan for that home.
Something else to consider: are there any proposed new roads or shopping areas, etc. being added near that home in the near future? Nothing like buying a home only to realize they are building a highway right behind your home….. Ideally your real estate agent should be looking into these items, but don’t be afraid to question anything you feel may be a red flag.
To recap the 5 tips for Millennials looking to buy their first home:
- Consider FHA loans.
- Research the market.
- Take your time.
- Don’t rely on everyone’s opinions.
- Make sure the home is a good investment.
Diane and William Kradel