One time I’m hosting a family gathering at my place when one of my aunt approached me with an inquiry – “so how much are you renting this home?” I just shrugged and said “I own it.” Her astonished look was normal since nowadays, especially with the way young people live, many are just forgoing homeownership for different reasons.
The first is because they want to wait until marriage thinking that at that point, they probably have a better idea of where they want to settle, including the workplace they want to be in. Another is they want a low-key, low-maintenance lifestyle that home ownership can heavily affect.
In all honesty, purchasing a home is still a great money move based on where you make the purchase. Let’s talk about some quick and useful tips you can easily use as you contemplate on buying your first home.
Assess Where You Want to Live
If you’ve been to several cities already, you might already home an idea about the things you want and those you don’t in a certain area. This will help you officially put down “roots.”
After being completely sure on where you want to live in the future, say three to five years, the next step is to crack your knuckles and figure out how much you can afford.
Start Building Up Your Credit
Most young people still have no or low credit. This means that you’ll have difficulties when trying to get approved for a mortgage. If you have zero credit, you can start by acquiring a credit card with a small limit and paying it off every month.
If you already have a credit in place, ensure that your credit report is accurate and that your balances at 30 per cent or below the credit limit to increase your credit score. Take not to pay all your balances completely and on time.
Faithfully Save for Down Payment
If you’re like most first-time homebuyers, then you also don’t have a large nest egg sitting hidden somewhere. The next step is to begin trimming your budget and save like you mean it. You don’t necessarily have to take 20 per cent of your paycheck, but what’s crucial is to consistently save money for six to 12 months before buying. This will allow you to build up your down payment fund.
Apply for Mortgage Pre-Approval
This step allows you to shop for a home with a definite idea of how much you can afford to spend. Don’t worry because getting pre-approved for a mortgage is generally easy. You can approach any lender to get pre-qualified. You can even do it easily online!
Take note that there are many types of loan products available. Many first-time buyers are advised to take advantage of the best fixed rate home loan offered by top lenders in their area.
End Note
Here’s the final kicker – and something you must know. Never buy a home that you know you can’t afford in the long run. It’s important to only purchase a home that you can comfortably afford especially if you have a low salary, student loan to pay and other variables in your budget.
Also note that while you’re approved to purchase for an amount, doesn’t mean that you should maximise it. Be a smart homeowner. Best of luck!
Featured Image Source: Flickr
