Buying a home in your 20’s
There is no reason that you have to wait until late in life to purchase a home if you use some smart financial planning. You could start having your monthly payments go towards home ownership instead of just wasting them on rent. Buying a home in your early years will also make it easier to pay your home off during your lifetime. Follow these simple steps to make buying a home a possibility in your 20’s.
Start saving today
You know that in order to buy a house you will need to have some cash to pay towards the down payment and to handle closing costs. You might as well start saving this cash as soon as possible. You can lower the amount of money that you need to borrow by putting a good chunk of cash down. It is a lot easier for a young person in her 20’s to save money since she does not have many of the financial liabilities of older people.
Create a good financial budget
You need to start determining whether buying a home now is affordable for you or not. Take a look at how much you are paying in rent and see if you can get a decent home for around the same monthly payment. You can use a mortgage interest calculator to help you see how much your monthly payments will be. Mortgage calculators will break your monthly payment down into categories for you. This is useful because you can see how much money each month is going to principal and how much will go to interest.
Find the right mortgage product for your goals
There are a ton of mortgage products out there. You can get a traditional mortgage for your first home purchase. A traditional mortgage will make it easier to budget for your mortgage payment month after month. If you are buying a property for investment then you may want to run the numbers in buy to let mortgage calculators. A buy to let mortgage can provide for some consistent income from leasing out a property.
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I think it is definitely possible to be a homeowner in your 20’s. It is crucial, however, to have a firm understanding of your financial situation and know what size of monthly payment will work within your existing budget.
With the proper budgeting, saving for a down-payment is definitely achievable. It’s important not to take on a large monthly mortgage payment that is more than you are comfortable with as well. It’s better not to strap yourself in as extra money also needs to be set aside for expenses that weren’t planned on, perhaps having an appliance break down and you need to pay to fix it or replace it altogether… the transition from a rental to owning a home can come with some unexpected surprises most people forget to plan for…
I completely agree. I have a few friends who have bought “too much house” and are now struggling to pay for their lifestyle.
Buying a home for the first time can be overwhelming for a first-time home buyer because few home buyers know where or how to begin the search to buy a home. The first home buying step should be to align yourself with a pro who has experience working with a first-time home buyer and can show you the ropes.