You might not think it is possible to buy a house when you are in your 20’s. A tough job market, student debt, and static wages might make it seem like an impossible task. It does not have to be this way. Actually, many people have been able to buy a home in their 20’s, and it will be a big boost for your economic future if you are able to do so as well.
Some might be able to ask their parents for help with securing a mortgage. Others might not have that luxury, but there are still options that you have if you want to become a homeowner.
Keep these tips in mind to help you buy a house in your 20’s.
Save Up for a Down Payment: One of the most important things to keep in mind before buying a house has to do with a down payment. You will want to be sure that you have a lot of cash saved up. A good amount to have stockpiled away is 20% of the price of the home you’re interested in. You might be able to apply and receive down payment assistance depending on your income, so do your research to see if you might be able to quality.
Fix Your Credit Score: A lot of home buyers who are younger have very short credit histories. This can be a big issue if you have a bad credit score. Many mortgage lenders only will take clients who have good credit scores and good utilization rations. You should be requesting free credit reports and doing everything you can to raise your score to a good level, if needed. If you can find someone with a good score to serve as a co-signer, even better.
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Buy a Starter Home: You don’t necessarily have to go out and buy the biggest and most expensive house on the market. If you’re buying a house in your 20’s, it’s probably not going to be your last home. So don’t be afraid to just make it an investment for the future.
Buying a starter home can be a big help to you down the road for a couple of reasons. First, starter homes usually come with cheaper mortgages so you can save some money. Plus, you might be able to actually get a better mortgage with a lower interest rate, which can be a big benefit to you if you’re planning on moving sooner than later.
Pay Off Student Loans: Most people in their 20’s probably have some student loan debts. A lot of lenders are willing to look past student loan debt to a certain degree, but too much of it is going to prevent you from buying a house.
There are a couple of things you could do. You could refinance your loan to extend its life and pay less monthly payments. Even though you’ll be paying more in the long run, that extra cash in your pocket might make it a lot easier to buy a house now and jump in on a low mortgage rate.
Save for Expenses: All homebuyers should be saving money for hidden expenses and costs. Gas leaks and roof damages can quickly add up. A lot of younger buyers might be less responsible with their money, which means the threat of overspending is a very real thing. Stay on top of your emergency budget to make the home buying and ownership process smoother.
Are you interested in learning more about buying a home in your 20’s? Call the Reed Team today at 949-392-6400!