In Your Twenties? Wanting to Buy a House?
Buying a house is probably one of the biggest and most important decisions that a young person can make. Just imagine it … No more rent!
However, doing it right is the best thing you can do to yourself. As a first timer, you are most likely anxious about buying a house. The process can be daunting for anyone, regardless of how old they are or how their personal financial situation is.
If you are in your 20s, the following tips will help you buy a house without going broke.
1. Know where you want to live
Job proximity, family, and quality of life influence this decision. So does the cost of homes in a particular neighborhood.
2. Build your credit score
In your 20s, many people have low or zero credit, so it is hard to find a mortgage lender. Look for ways to build credit. You could get a credit card and pay it off every month. Pay your bills on time—late car payments and rent payments can come back to haunt you later.
3. Save aggressively
While staying on top of your bills and credit, put as much as you can into savings. The bigger the down payment you can make, the easier it will be to get a mortgage. Remember … You also need money for closing costs.
4. Decide how much house you need
Use a loan calculator to figure out how much house you can afford. The biggest mistake that you can do is buying a house that you cannot afford. Consider your student loan payments and other variables in your budget.
5. Get pre-approved
Getting pre-approved for a mortgage is not a hard task, but you need to get organized. Be ready to show proof of monthly income, the sum of your total monthly debt payments and your credit history.
These tips originally appeared in Lauren Bowling’s blog.