In today’s landscape of home buying, the millennial generation touts a strong sector of first-time home buyers. These are tech-savvy, well educated individuals, many of which are considering whether or not it is their time to purchase a home for the first time. Here are 5 things to consider before diving into home ownership.
1. Do you have a steady income?
Obviously, it would be impossible to make a monthly mortgage payment without a regular income. Truthfully, you probably wouldn’t even be approved for a mortgage without one. So, if you don’t yet have much of a job history, it may not be your time to buy a home. While you’re working to build up your resume, you also can build up other parts of your financial picture, so that you’re fully prepared to apply for a mortgage when the time is right.
2. Is your credit score high enough?
Your credit score is another big part of your financial picture when it comes to buying a home. In college, you likely were offered every opportunity for credit available. Accepting one or two credit card offers and using the cards responsibly may have helped to establish your credit history. However, if you accepted every offer that you were given and accrued high balances on each card, you could be in some trouble when it comes to buying a home. Get familiar with your credit score if you think you’re ready to buy.
3. Have you saved enough money?
For some mortgages, buyers need to save 20% of a home’s price. Some down payments are less, but many buyers still need to bring a considerable down payment to the table before they can purchase a home. Of course, the down payment is not the only money that a person needs to bring forward during the home-buying process. There also are inspections, appraisals and titles, just to name a few of the fees associated with the closing process. If a millennial buyer is ready to make a home purchase, they will need to have a significant amount of money saved.
4. Are you ready to be settled?
Many millennials are at the beginning of their careers. So, it is important to ask whether or not they feel ready to settle down and stay in one place for a long-term period. No, you don’t have to stay in a home forever, but it may not be a wise decision to buy a home that you plan to leave after a year or two. If you are the type of person who likes to pick up and move to a new place on a whim, home ownership may not be right for you just yet.
5. What kind of home do you want?
If your job history, finances and credit are in order, you’ve got to ask yourself what style of home is right for you. Here’s where you need to think short-and-long-term. Right now, a high-rise studio apartment in the city may seem like an ideal location for a single millennial buyer. However, if you’re that buyer and you can see yourself with a spouse or family in a few years, renting that perfect pad may be a better option. In the not-so-far-away future, you may be thinking more of a single-family home in the suburbs! Make sure you look at the bigger picture before picking the home that’s right for you.