Buying a home is a lot different these days than it was a decade or two ago. Millennials currently seeking to buy a home for the first time need to keep a few things in mind before they take the plunge.
The following are five tips to make the home buying process easier for millennials:
- Buy during the right time – Research the local real estate market. The best time is a buyer’s market, which means there are a lot of sellers and fewer buyers. As a result, you’ll have more room to negotiate and less competition.
- Know the true homeownership costs – Mortgage payments won’t be the only financial burden of homeownership. You’ll also pay:
- HOA fees
- Homeowner’s insurance
- Mortgage insurance
- Property taxes
- Utility costs
…and more. Keep this in mind as you develop your budget.
- Pay off your debts first – Many millennials have large college loan debts. If you have any outstanding debts in your name, try to pay them off before you apply for a home mortgage, or you could find yourself financially strained.
- Save up for a down payment – The bigger your down payment is, the less your monthly mortgage payments will be. Your interest rate will be lower as well. By saving money so you can make a larger down payment on a home, you’ll save more money.
- Understand the closing costs – There are more money responsibilities after the down payment. You’ll be expected to pay for a variety of closing costs, including loan-related and property-related fees. Typically, closing costs account for 2-5 percent of the total cost and must be paid at the time of closing.
These are five tips of which all millennials should be aware when buying a home. For additional first-time home-buying advice, contact us at Randy Lindsay today.