Tips for Millennial Home Buyers

What is a Millennial?

Millennials, also known as Generation Y or the Net Generation are the demographic cohort following Generation X. Millennials are the generation born between 1982 and sometime in the early 2000s. Some other definitions have the Millennial Generation starting as early as 1978 and as late as 1985. The generation is usually associated with technology and social media.

If you are one of our permanent readers, (by the way, how is it going? Enjoying our posts?), you might remember we’d asked a question about what you would like to read. So, from several most wanted topics, we’ve decided to start from this one – tips on buying a house when you’re in your twenties.

With a sky-high level of unemployment, student loans and not being tied down by roots, millennials have made some changes in the real estate market. Some of them want more freedom, a dream of traveling around the world and don’t want to take on more debts. Still, there are many, who are in their 20s and 30s and despite horror stories about home ownership they might have heard, are willing to own a home. Firstly, you should keep in mind that buying a home is a big commitment. Ask yourself if you’re prepared and patient enough: are you really ready and willing to take on a mortgage?

Tips for millennial home buyers:

Set your budget.

Now when you’ve made up your mind to become a homeowner you need to look at what you can afford. It would be an advantage if you could pay off some of your small debts. For instance, if you have a student loan, (find out how your student loan will have an impact on your home mortgage in the paragraph provided at the end), car payments or credit card debt. However, if you’re not able to pay off any small debt, just make sure not to miss a payment. Keep in mind, you should know for sure what you can afford, not you want or think you can afford. Find some mortgage calculators available online and see how your monthly mortgage payments could be. Try to build some savings. This is really an extremely important point once you’ve decided to buy a house. During and after home buying process you’ll definitely need some extra money set aside for down payment, closing costs and any other unexpected costs. We’ll get back to these in next tips.

You’re not alone.

As always, you should remember that you’re not alone when making an important decision like buying a home. Don’t be too proud or shy to ask for advice. Remember people who have had such experience from your family, maybe elderly members or friends. Ask your parents. Surely they might have bought a home on a quite different market, but they simply have more grey hair and have much more experience in buying and financing. They can add a dramatical value to your home search.

Hire a realtor you trust.

After taking the previous two steps, you should think about getting professional help. Surely, with today’s Internet of things and easy access to online listings, you may think buying a home could be something like buying a new smartphone. You’re deeply mistaken. Buying a home is a deal of a professional. At least you’ll need to consult with one or a few realtors. Consider that home buying can be an emotional decision. Not to fall in love with a home, at first sight, you might really need a good agent. We strongly recommend taking your time and reading this article not to make any of the mentioned mistakes the first time home buyers tend to make.

Don’t hurry, be patient.

Have a look back and you’ll get the feeling that you’re struggling with this in your everyday life. In fact, the whole generation faces this problem. You want what you want and you want it now! Right? Be patient. The home buying process is not short, and even more importantly, not sweet, either. You should do a long search and then you need to choose wisely. Remember, just ok is not OK. You should take your time and look at all the houses you find – is there one fit for you? Only when you find the house you’re really happy with you can make a final decision.

Location! Location! Location!

Does this seem too familiar? Yes, it’s a common saying when it comes to real estate. Finding the right location for you can be crucial. Consider your lifestyle. Rethink whether you want to be close to your family, friends, workplace or school. As to you, is your home a starter home or a forever one? Think about your future. You might want to know how it would go when you decide to resell it or how far your home would be from school for your future kids. Especially, if you’re in college and don’t know where you will be able to find work, you should choose the location very carefully. Be sure, the location and neighborhood of the home is really the biggest factor in the home’s value. So, try to find your perfect location. At the end of this article, you’ll find a great source on how to choose a great neighborhood. In addition, you should think about the home type you want and need. There are many options such as single family, multi-family, condo, mobile home and other. It’s up to you to choose, as each of the mentioned types has its advantages and disadvantages.

Don’t underestimate home ownership and closing costs.

According to a survey, two-thirds of Millennials are not aware of closing costs. These costs include all the fees over and above the price the property buyers and sellers have to pay when completing the real estate transaction. Closing costs include but are not limited home inspections, taxes, credit report charges, mortgage insurance. Also, you should have a strong grasp on all the costs that come with buying a home. You’ll probably need to pay for appliances and furnishings, fix something that has broken and take care of your lawn. Aw yes, don’t forget about moving expenses!

The stress is over: Let’s party.

So far when you’ve taken all of these steps, and we hope these tips helped you a lot, now you can take a deep breath. You’re done with your first home buying. Now you’re a homeowner and can have a mega-party to relax and show your home to your family and friends.

 

If you decided to give www.JustClose.com a try and, for an example, as a buyer of home (registration is free for buyers), the application will help your decision on what are the features of the house that you will appreciate.

The application will provide you with a better understanding of compromises you’re willing to make if the house of your dreams is not affordable at a present time (we named this part of our application as “ Interview “ which mimics real estate agent buyer’s questions).  Your choices will help you to evaluate how much individual features of the house will influence your decision.

To make it more interesting, the application uses a part of the “Interview” to calculate the matching score between your expectations and the available houses in our database. This is the most accurate way for you to know what compromises you’re willing to make. The application will generate a series of hypothetical scenarios for you and ask you to choose between specific houses you’d like to buy. This will provide a fine tuning of your dream property.

As a result, you’ll receive information that reflects the thinking process of the real estate agent. And every time after you process your “Interview” using different scenarios, our application will display all the houses that match your choices the most, see an example below:

QIP Shot - Screen 089

Additional Resources:

How Do Student Loans Affect Getting A Mortgage To Buy A Home? by Kyle Hiscock

11 Hidden Costs Of Owning A Home from Investopedia by Michele Lerner

5 Things Real Estate Agents Don’t Know About Low Down Payment Options by Bill Gassett

By: Hermine Aslanyan

…Did I Miss Something? What Would You Add?

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3 thoughts on “Tips for Millennial Home Buyers

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  2. Hey I know this is off topic but I was wondering if you knew of any widgets I could add to my blog that automatically tweet my newest twitter updates. I’ve been looking for a plug-in like this for quite some time and was hoping maybe you would have some experience with something like this. Please let me know if you run into anything. I truly enjoy reading your blog and I look forward to your new updates.

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