Buying Your First Home In Your 20's
Buying your first house can be an equally exciting and daunting time at any age, particularly if you are in your 20's. Buying property represents a major milestone and is a sign to you, your family and your friends of your move into the adult world. However, balancing your busy life of working, hobbies and socialising with the added responsibility (and debt!) of owning your first home requires a lot of careful thought and planning to ensure that it aligns with your personal situation and financial goals.
Before buying your first home and making big decisions, it is useful to consider all your financial options, as well as the following tips from those who were once in a similar position to the one you are facing now.
1. Invest long - term
When buying your first house, it's important to consider the long-term monetary value of the property to ensure it aligns with your financial goals. One consideration is to use your first home as an investment property as a means to work towards your long- term financial independence.
Acquiring a mortgage on an owner-occupier property can be more difficult if you're studying or a recent graduate. However, renting out your first home as an investment property and having tenants pay off your mortgage may allow you manage your finances more effectively.
2. Save smart and frequently
Banks, credit unions and other financial lenders want to see evidence of strong and consistent savings over time. By creating good saving habits as early as possible, particularly when you are young,you put yourself in a better position to have your loan approved.
Maintain a clean credit history
Build a clean credit history as early as possible - preferably from when you start earning money. This means ensuring all your bills are paid on time. If for whatever reason you are not able to, it is important to make alternative arrangements with your creditor, as they may lodge a default claim against you.
3. Learn from others
As with most things, there is always an opportunity to learn from others. For many people, buying a house in their 20s is likely to be their first major investment. It is important to learn from and speak to as many people who have gone through the same process to gain a realistic perspective of the financial journey as well avoid any common mistakes or pitfalls.
4. Not getting a pre-purchase inspection report
Older homes that need minor or cosmetic repairs and renovations, can sometimes be some of the best real estate deals. Houses that need a significant amount of work can be some of the worst home buyers deals for new homeowners and unfortunately, many of those major repair jobs are usually hidden from view. The message here is to not fall into the trap of trying to save money by not purchasing a pre-purchase inspection report. Failing to do so and dealing with any potential major house flaws can cause many headaches and set you back thousands of dollars down the road.
As with everything, it is best to learn as much as possible and be realistic with your current and future goals so that you may plan accordingly. If done right, you can be sure you’ll soon be enjoying your first home or the start of a lucrative investment portfolio!
Thinking of buying your first home? Get in touch or find out how much you are eligible to borrow with our loan calculator.
Posted by First Home Buyers Direct on 22 February 2017 | 0 comments
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