With the housing recovery well underway many prospective home buyers are now in a better position to enter the housing market and buy their first home. Interestingly we’re seeing a shift towards younger buyers. Referred to as the Millennials, these buyers are moving from the rental market towards a home purchase (renting has become increasingly competitive and pricey as shown in this article here). Now these young people may be in a better financial position and are earning enough stable income to afford a home, although they may still be paying off their student loans. Particularly with rising rental costs, many millennials are looking forward to buying their first home and to start investing in their future. So what do these younger buyers need to know? Here are 5 real estate tips
Tips for Millennials
1. Avoid overbuying. Don’t tie up all your money in your first home purchase. Yes, at this point you likely are more settled and can reasonably see that you probably will live here for a long time, however, nothing is guaranteed. If you have children, you may have to consider saving for college expenses. And if you don’t have children, you may have to consider aging parents who will need care eventually. In other words, don’t stretch your money to the limit to buy your dream home now.
2. Avoid basing your max budget on what the lender says you qualify for. You may be planning future home improvements, nice upgrades, or furniture purchases. If you buy a home at your mortgage limit you may wind up later not having the financial wiggle room to tackle these other projects.
3. Don’t forget to consider the quality of the schools assigned to the home you are purchasing. Even if you don’t have school age children, highly rated schools always increase the property value. And if you do have children, living in a good school district means you won’t have to spend the extra money to send them to a private school.
4. Don’t forget to consider how far you will have to commute. A long commute can grow old quickly. It’s easy to fall in love with that home out in the quiet suburbs but if you’re driving on the interstate for 45 minutes every morning in heavy traffic you may feel the trade off was not worth it.
5. Don’t go it alone. Use a competent real estate agent to take you through the buying process. Although you can search online and find homes that may be a good fit for you, a real estate agent is an invaluable professional when it comes to negotiating terms, organizing inspections, coordinating with the lender and the closing attorney all the way to a successful purchase.
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