88 percent of millennials who don’t own a home have one on their wish list (Qualtrics) If you’re in that 88 percent, chances are you expect a lot from that first home and you’re cautious putting your hard-earned dollars into that big of an investment. As you weigh the pros and cons, here are 5 things you as a millennial should do before buying a house.
Create a budget and stick to it.
Daydreams and budgets can coexist! Create a wishlist, but also set a clear spending threshold. Talk to your realtor about how to merge those two. They can tell you what your budget will buy and help you only look at houses that are within your means. It’s smart to budget a bit more than necessary, though, just in case there are renovations that need to be done or unforeseen moving expenses. But you don’t have to spend more than you can afford. Don’t forget to save up money for a downpayment (typically 20% of the cost of the home).
Boost that credit score.
Raising your credit score quickly can take some dedication, but if you stick with it, it’s totally doable.
“Any score above 670 is considered very good. Anything below 600 is considered weak.”
-Lou Haverty, CFA (chartered financial analyst)
Try using your credit card to pay things you know you have to pay like bills or gas. Then as soon as the credit card bill shows up, pay it off before you can think twice about it.
Shop around for interest rates.
This may sound like common sense, but don’t accept the first interest rate you hear as the standard. Shop around, talk to several banks and compare what they’re offering you. Get someone who’s already bought a home to help you look over your options and help you determine what’s a good deal and what isn’t.
Look beyond your wishlist.
It’s really hard for millennials to consider their needs alongside their wants. Millennials have larger than life vision for their lives, so it’s easy to neglect factoring “boring” things such as location, commute time, length of time you think you’ll be living in the home, and school districts into their decision. But not doing so will only lead to frustration down the road.
Don’t snub your nose at fixer-uppers.
The colors of the walls, the vanity in the bathroom–these are all things you can change for relatively little money, so don’t shy away from homes that need a little “makeup.” Of course, if you have your heart set on something that will only cost you more money in the long-run to install, put that on your “dealbreaker” list.
Remember, if you have any questions about buying your first home – we can help!
Give us a call at 205-285-8888!