FIRST TIME HOME BUYER - DO YOU HAVE TO BE IN YOUR MID 30'S?
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When you think of a homeowner, do you think of a college student? Probably not. The average age of today's first time homeowners, according to Zillow, is 34. Why is that? Does it take 16 years after graduating high school to get a decent credit score? Does it take 16 years of skimping and saving to be able to afford the down payment? No! According to Experian, one of the major credit bureaus, it takes between 3-6 months of regular credit activity for your file to become thick enough to calculate a credit score. Also, there are many financing options available with an extremely low down payment! The reason that 34 is the average age of first-time home buyers, is because not many understand how easy buying a home is. If you want to buy a home in your 20's, here are 5 easy steps.
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1) Commit.
Buying a house is likely one of the largest purchases you will make in your entire life. You need to know that you are ready for that type of commitment. Most home buyers stay in their residence for at least three to five years, mainly to recoup from the cost. Unlike renting, you are responsible for maintaining the property. However, you won't have to renew a lease, deal with a horrible landlord, or room mates.
2) Understand Your Finances.
When it comes time to buy a home, a lender will consider every part of your financial picture. From your salary, to your bills and spending habits, to the money that your Aunt Jill sent you when you graduated. Since the bank is going to dive deep into the depths of your financial history, you should probably do the same. Find out how much money you have coming in and going out, and how much money you would be able to devote to a monthly mortgage payment.
When you are considering your finances and budget, also consider the fact that home ownership fees don't end with the monthly mortgage payment. Home owners are responsible for insurance, property taxes, and any money it costs to cover routine maintenance or unexpected home repairs. Even though there is more than just mortgage that you are responsible for as a property owner, it may still be cheaper than paying rent. It all depends on your situation. If you want to know for sure, fill out the form on the right to get a hold of a real estate professional, or call 435-220-3393.
Buying a house is likely one of the largest purchases you will make in your entire life. You need to know that you are ready for that type of commitment. Most home buyers stay in their residence for at least three to five years, mainly to recoup from the cost. Unlike renting, you are responsible for maintaining the property. However, you won't have to renew a lease, deal with a horrible landlord, or room mates.
2) Understand Your Finances.
When it comes time to buy a home, a lender will consider every part of your financial picture. From your salary, to your bills and spending habits, to the money that your Aunt Jill sent you when you graduated. Since the bank is going to dive deep into the depths of your financial history, you should probably do the same. Find out how much money you have coming in and going out, and how much money you would be able to devote to a monthly mortgage payment.
When you are considering your finances and budget, also consider the fact that home ownership fees don't end with the monthly mortgage payment. Home owners are responsible for insurance, property taxes, and any money it costs to cover routine maintenance or unexpected home repairs. Even though there is more than just mortgage that you are responsible for as a property owner, it may still be cheaper than paying rent. It all depends on your situation. If you want to know for sure, fill out the form on the right to get a hold of a real estate professional, or call 435-220-3393.
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3) Credit and Savings
We touched on credit before, and how it takes an average of 3-6 months to build some type of credit, but how good is yours? The higher your credit score, the lower the interest rate you will have on a loan and the more you can qualify for. Savings is also important, because of the big down payment. Do you have enough money for a down-payment? Here are some numbers that are guidelines! This is not a guarantee, but basic guidelines for what the minimum credit score and down-payment are for different programs.
Conventional and FHA loans usually have a minimum FICO score of 620. The down payment can be as low as 3%-3.5% of the total purchase price in some programs. For Veterans and those living in rural housing, there is a possibility of 100% financing. Again, these are relative GUIDELINES. Talk with a lender to see what you can qualify for. To find a lender that is right for you, fill out the form to the right or call 435-220-3393.
We touched on credit before, and how it takes an average of 3-6 months to build some type of credit, but how good is yours? The higher your credit score, the lower the interest rate you will have on a loan and the more you can qualify for. Savings is also important, because of the big down payment. Do you have enough money for a down-payment? Here are some numbers that are guidelines! This is not a guarantee, but basic guidelines for what the minimum credit score and down-payment are for different programs.
Conventional and FHA loans usually have a minimum FICO score of 620. The down payment can be as low as 3%-3.5% of the total purchase price in some programs. For Veterans and those living in rural housing, there is a possibility of 100% financing. Again, these are relative GUIDELINES. Talk with a lender to see what you can qualify for. To find a lender that is right for you, fill out the form to the right or call 435-220-3393.
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4) Find a Lender and Get Pre-Approved
All buyers differ and lenders do as well. Some offer different programs or have different specialties. Most people have the misconception that once you are pre-approved, you have signed away your soul to that one lender. That is not the case! You do not have to choose the first lender you speak with either, you have the ability to cross-check many lenders to find the right fit for you. 5) Work with an Agent you Trust Ah yes, the ever-important last piece of the home-buying puzzle. This is one example of when DIY is not the right mentality. It all sounds so easy until you try write up an offer. There are many do's and dont's of contract writing that only those who do this professionally understand. Professional real estate agents have the training and know-how to lead any first-time home buyer to a place that is right for them, for a price within their budget. Your trusted realtor will help you make up your "needs and wants" list when it comes to a home. They will help you consider your long term goals. They will search for homes, show you properties, negotiate and walk you through the entire offer and closing process. Right up until those front door keys fall into your hands. If you are in your twenties, and feel like you are ready to buy a home, GREAT! I want to help! We want to help! You are never too young to start planning your future. Fill out the form to your right, or call 435-220-3393 and let's get you a place you can call home! |
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