The Ultimate Millennial Guide To Buying A House Fast
Millennials are the largest generation, outnumbering both baby boomers and Generation Z. Millennials are those born between 1981 and 1996, and if you are a millennial, you are probably at that phase in your life when many of your peers are becoming homeowners. You also want to own a house but don’t know where to start. You have found the right guide.
You see, home ownership is not like leasing. It is owning your home, a place you live and refer to as your primary residence. It’s when someone has bought a piece of property and has the legal rights to use and occupy it as their own.
Benefits of owning own home
There are so many benefits to owning your own home. It brings a sense of stability, security, and pride in ownership.
You do not have to worry about rent increases with your own home because you have locked in your housing cost. And the payment you make each month goes towards getting you your place instead of just renting.
Plus, it can be a good investment, as the property’s value can increase over time. If there is something that history has taught us, it is that homeownership is a great way to build wealth without paying capital gains.
We could write an entire post on the benefits of owning your home, and we still would not exhaust them. However, we admit that becoming a homeowner is difficult, especially when you do not know how to go about it.
So, we are giving every first-time home buyer millennial the perfect gift, the ultimate guide to buying a house fast.
We will walk you through the process of becoming a homeowner. We will provide you with all the necessary information, from home-buying to choosing the right location for your new home.
Ultimate Millennial Guide To Buying A House Fast
Buying a house as a millennial can seem like a daunting task, especially if you’re looking to do it fast. However, with the right approach, you can make your dream of homeownership a reality. In this guide, we’ll offer you with best tips and strategies to assist you in buying a house fast, from assessing your financial situation to working with a real estate agent and being flexible with your preferences. Let’s get started!
Older Millennials And The Responsibility Zone
As Millennials grow older, they are thrust further into the responsibility zone. It is a time when your actions are a result of certain responsibilities.
You start dating with the intent of marriage, and baby videos make you think of your own kids playing in your yard.
You are also more likely to be thinking about leaving home and moving to a place of your own.
It took us a while, but the economy has recovered from the crash that hit the housing market. This means more millennials are looking to find their own place and are building up their credit score, so homeownership is possible.
At the moment, Millennials represent 43% of homebuyers, the highest of any generation. And this number will continue to grow as more people are pushed into the responsibility zone.
Understanding The Home-buying Process
Let’s talk about how you can become a homeowner. In this guide section, you will understand what it means to be a homeowner.
We will look at the different types of homes, so you can decide which is best for you. We also discuss getting pre-approved for a mortgage and what house inspections entail.
Types Of Homes
The first step to becoming a homeowner is deciding the type of house you want; this can be daunting. There are different types of houses, each designed for specific purposes and locations. Here are a few options open to you.
Single-family homes are standalone houses that are not attached to any other properties. They are meant for one family.
These homes offer more privacy and space than other types of homes and are a popular choice for families or individuals who value their own space.
They typically have a yard, garage, and multiple rooms and are often surrounded by a fence or hedge for extra privacy.
If your new home is not single-family, then it is multi-family, regardless of what type of home it is.
Bungalows get their origin and name from Bengal, India. They look like cottages and cabins and usually have a low, open roof, a small porch, and a compact front.
Bungalows don’t all look the same. There is the traditional Craftsman bungalow and the more common modern bungalows. You will surely see different types of bungalows in your house-hunting journey.
Ranch houses are typically single-story houses with long and low roofs. They consist of connected and open living rooms, dining areas, and kitchens with separate bedrooms.
Some come with basements and patios, although these are not usually the case.
A ranch house can also be split-level, with more than one floor, although this is less common.
Condominiums, or “condos,” are multi-unit buildings where each unit is individually owned. Owners of condos share common areas such as the lobby, pool, and gym but have their own private living space.
Condos are a popular choice for those who want a low-maintenance lifestyle, as the homeowner’s association takes care of many of the building’s upkeep and maintenance responsibilities.
Apartments are rental properties that are typically part of a multi-unit building. They come in various sizes, from studios to three-bedroom units, and offer a convenient and flexible housing option for those who are not yet ready to buy a home or prefer to rent.
This does not mean that you can’t buy apartments. It is possible to buy an apartment.
They are a popular choice for urban living and are often close to shops, restaurants, and public transportation.
Townhouses, also known as row houses, are similar to single-family homes but are attached to other homes on one or both sides.
They offer a compromise between single-family homes and apartments, offering more space than an apartment but less privacy and outdoor space than a standalone home.
They are a popular choice for those who want a bit more space and a yard but want to avoid the responsibilities of a single-family home.
Pre-Approval For A Mortgage
Once you have chosen the type of home you want, the next step is to get pre-approval for a mortgage from a lender. It’s like a physical exam but for your finances. Lenders will closely examine your finances to ensure you will pay back the loan you are getting.
Getting a pre-approval letter gives you an idea of how much you can afford to borrow and helps you narrow your search for a home.
Buying a house fast is possible. Here are the steps to get pre-approved for a mortgage:
Check your credit score: Before you start the pre-approval process, check your credit score and credit report. This will give you an idea of where you stand. It is also helpful information for calculating what your interest rate will be.
Gather financial documents: You will need to provide information about your income, debts, and assets to the lender. This includes your W-2 forms, pay stubs, bank statements, and tax returns.
Find a lender: Research and compare different lenders to find the best mortgage rates and terms. You can also work with a mortgage broker to help you find the right lender for your needs.
Apply for pre-approval: Once you have found a lender, you can apply for pre-approval. The lender will review your financial information and credit report and give you a pre-approval letter stating how much they are willing to lend you.
Negotiate terms: Based on your pre-approval letter, you can start negotiating the terms of your mortgage. This includes the interest rate, loan amount, and loan terms.
Get a commitment letter: Once you have agreed to the terms of your mortgage, the lender will provide you with a commitment letter. This letter is a binding agreement that outlines the terms of your mortgage and is a key step in the home-buying process.
Getting pre-approval for a mortgage can help you feel more confident in your home-buying journey and give you an edge in a competitive housing market.
Once you have pre-approval for a mortgage, the next step is the home inspection. A home inspection helps you make an informed decision about the home you want to buy.
It gives you detailed information on the house’s condition, so you know what you are getting into if you decide to buy.
While it might be tempting to do it yourself, a home inspection should be conducted by a qualified home inspector.
The home inspector will look at anything that might affect the property’s value, including the state of the HVAC system, plumbing, water, electrical connections, and sewage.
They will look out for fire damage, evidence of insect infestation, and just about any other issues that might make you not want to go ahead with the purchase.
With the information the home inspector gives you, you can decide to go ahead with the purchase or search for a better option.
Choosing The Right Neighborhood
You might have gotten caught up in all the excitement of looking for the place that you forgot to answer a vital question, what kind of neighbourhood do you want to live in?
Choosing the right neighbourhood is important, especially when buying your first home.
However, since it is your first time owning your own house, you might need help figuring out what to look for. Here are a few things to consider when searching for the ideal neighbourhood.
The best neighbourhood is one that has access to all your needs. How close is it to the nearest grocery and department stores? You would not want to dread every trip you make to buy essentials.
An ideal neighbourhood should also be close to a pharmacy and a hospital in case of an emergency. You would also want your new home to be in a place that is close to work.
Since this is your home for the foreseeable future, it might be great if it is located close to schools, especially if you plan to have kids. Look for a neighbourhood with a good school district.
Safety And Security
This is the most important factor to consider when buying your new home. If you find a neighbourhood in the perfect location, try to find out how safe and secure the place is.
What are the crime statistics? A couple of breaking and entering per year might not cause worry. But you would not want to stay in a place with high criminal activity.
Ask questions about streetlighting and the presence of a neighbourhood watch. These little details might not seem like much, but they make all the difference.
A neighbourhood is not complete without outdoor amenities. So while your house inspector is doing his job, take a walk around the neighbourhood.
Look for amenities like sidewalks, parks, and walking trails (if you have a pet). Parks are great for dates, and sidewalks make walking easier.
Look out for other outdoor amenities you think are necessary, and if you can’t find one that is a deal breaker, you might need to move on to a new neighbourhood.
These are all things you should look out for in a great neighbourhood. But understand that there is no such thing as the perfect neighbourhood. Stick with one that is relatively secure and provides for most of your needs.
This part of the guide is important because it prepares you for what happens after you purchase your home. Let’s look at how to create a budget for your home and some important details you should consider when doing so.
This is the most important part of your budget. How do you intend to pay for your mortgage? Set aside a percentage of your income towards mortgage payments.
Here are our two cents about the matter; your mortgage payment is easier if you avoid cutthroat mortgage programs.
Carry out proper research before choosing one, and whatever you do, stay caught up on payments, or you might risk foreclosure.
Your mortgage is not the only payment you should save up for. Buying your dream house means getting used to paying property tax. So when making your budget, ensure you include plans for paying this tax.
Your property tax depends on the value of your house, the county you are staying in, and the local real estate environment.
It is subject to change, so research how much you need to pay and budget towards making payment.
We do not pray for it to happen, but once you get a house, it is liable to lose and damage. This is why saving towards getting a Homeowner’s insurance plan is a great idea.
When you get homeowner’s insurance, you protect your home and the assets within them from these losses and damages.
You have to pay an annual premium, so it is a good idea to add it to your budget and save on it.
Saving For A Down Payment
Ask a group of Millennials why they are still renting, and they will tell you that they are scared of the down payment. It is one of the top two reasons people would rather stick to renting.
However, saving for a down payment does not have to be scary. First, the minimum down payments is less steep than most people make them look. With the proper planning, you can save up the down payment for your new home in no time.
Setting a Saving Goal
The first thing to do is have a goal. How much are the mortgage and the down payment you have to make? After this, you have to start saving. The amount you save and the time it takes you to save up to that amount are dependent on a couple of factors:
What is your income like, and how much can you set aside each month?
How much do you want to spend on monthly mortgage payments?
How much is the down payment, and how much are you willing to save?
Remember, the value of where you want to get and how high your down payment is will determine how long you have to save.
A great way to ensure you are on track toward achieving your saving goal for your down payment is by automating the process.
This is especially beneficial if you have a regular paycheck or source of income. Make it so that a portion of the money goes directly to the savings account.
If you do not have a regular paycheck, set up your checking account so a recurring transfer is made to your savings account.
Another way to quickly save up your mortgage down payment is to get a side hustle. If your job isn’t paying you enough, you could do something on the side and channel the profit from that business toward making your mortgage down payment.
You can also ask for help from your family and loved ones. In fact, many first-time homeowners got help from their family members to make their down payment.
Whether you bake some cookies, draw tattoos in your parent’s basements, or ask your favourite rich uncle for help, they are all great ways to save for your mortgage down payment.
Common Home Buying Challenges
We will be the last person to tell you that getting your first home will be easy. It is a difficult path riddled with challenges. However, knowing these challenges will prepare you for how best to tackle them. Here are a few challenges you might face as you set out to buy your first home.
High Student Loan Debt
Millennials are the most educated generation in global history. However, they are also the generation with the most student loan debt in global history. Some millennials graduate with debt as high as a mortgage, although this isn’t always the case.
Statistics show that the average student leaves college with a debt of up to $25,000. For someone with this type of debt, paying a mortgage might not be the first thing that comes to mind.
Lack of Savings
A lack of savings is another challenge millennials face when embarking on their homeownership journey. With their finances riddled with debt, most millennials struggle to pay off debts and pay for their necessities.
Everyone knows how important it is for us to have savings, but under these circumstances, it is challenging to save for a mortgage. This is why most millennials are either staying with their parents or renting an apartment.
Competition in Popular Neighborhoods
Even when you have enough saved up for a mortgage, you might not be able to afford the house of your dreams because of how competitive getting a home in a popular neighbourhood is.
Everyone wants to stay in a great neighbourhood; however, this demand and competition also mean the value of the real estate in the neighbourhood will increase.
Tips for a Successful Home Purchase
Let’s now look at some tips to ensure you become a homeowner on your first try. These trips will eliminate the hassle and ensure you get it right on the first try.
Hiring a Real Estate Agent
Do not try to do it yourself. Hiring a real estate agent to help with the process. Good real estate agents will educate you on your options. Getting your dream home on the right budget should be the goal. They should be honest and willing to have tough conversations with you.
Related: How to Buy a Foreclosed Home: A Beginners Guide
How to Buy a Foreclosed Home: A Beginners Guide
Researching Home-buying Programs
There are special home-buying programs, especially for first-time home buyers. These programs widen your choices and give you a higher chance of owning your home without making exorbitant mortgage down payments. Buying a house fast is possible as long you have a smart plan in place and execute it well.
Making a Competitive Offer
Finally, when you find your dream home, make a competitive offer. If it is a great home in a great neighborhood, other people will also be making offers. Stay within your budget but ensure your offer is competitive enough to get you the place.
Wrap up – Buying A House Fast
In wrap up, buying a house is a significant financial decision, especially for millennials just starting their careers. It is essential to prepare adequately before embarking on the house-hunting journey.
Following the first-time home buying tips outlined in this guide, millennials can make the home-buying process fast, efficient, and stress-free.
These tips include starting with a realistic budget, getting pre-approved for a mortgage, choosing a reliable real estate agent, researching the local real estate market, and being ready to make an offer.
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