Owning a house is a dream many of us have. The process of buying it is an important financial decision. Most adults nowadays typically make this decision in their 30s, spending their 20s renting. They wait until they have hit their third decade because it allows them to prepare for the weight of all the payments they have to make.
It is a popular decision for millennials to buy a house when in your 30s. But this does not mean that it is impossible to do so before then. Below we discuss a few tips to prepare yourself for homeownership while in your 20s.
Decide on the Location and Type of Property
Location is crucial in real estate. Given that millennials tend to hop around jobs, it is important to think about how long you plan to stay in one area. After your career, decide upon the places you wish to be near your home. This should be followed by what you want to have in your own house.
When you’ve settled on a few key details, you can then check any homes for sale in West Melbourne listings. Doing so will help you narrow down properties based on taste and projected budget.
Evaluate Your Finances
Assessing what you have is one of the most critical steps in the entire process. Review your Equifax score since the mortgage you will be able to avail will depend on its value. Typically, people in their 20s have little to no credit score.
If you are not part of that demographic, try to maintain or at least elevate the credit score you have. You also need to manage your budget carefully. A way to do this is by tracking down all of your expenses each month and deduct it to your salary.
Through this, you will be able to make a bank strategy come the time you have to make monthly payments for your home.
Study and Apply for a Loan
Knowing how much you can borrow will ultimately affect the kind of property you can purchase. If not that, it can affect the amount of time in which you will be paying for your home. This is why it’s critical for you to know what kind of loan you’ll be eligible for.
Some loans to look into are the Variable Rate Loan, the Fixed Rate Loan, and the Split Loan. The monthly rate that you have to pay will depend on the kind of loan you avail.
Prepare the Down Payment
Throughout the entire process, the down payment is likely to be the heaviest for your wallet. Fortunately, there are many ways for you to leverage the amount needed. One of which is through the family. If your parents are willing, they can either give you the full amount or even a portion of it.
It is also possible for them to loan the money out to you at a much lower interest than providers. If none of these is possible, look into down payment assistance. There’s the First Home Owner Grant to take note of. As its name suggests, this grant was created to provide aid for first-time homeowners.
The State or Territory Revenue Office is the one that issues this grant.
While looking into other possible assistance, it is best to save up for the deposit yourself. This gives you something to fall back on when all else fails, although it will take you much longer if you did not have a deposit already saved up.
Endeavouring to purchase a home in your 20s is no easy feat. As gruelling as the tasks may be, you’ll surely be fulfilled once you attain a milestone so many wait for long to achieve.
