Ever since I was young I wanted to own a home. Although I didn’t necessarily see myself living in a three bedroom house on a cul-de-sac with a white picket fence and two-door garage (no offense to those who do), I knew that in the long run, I wanted to own instead of rent. Why help pay down my landlord’s mortgage when I could pay off my own? And despite condos and co-ops seeming like good options for an inexperienced first time home buyer, I wasn’t a fan of the monthly HOA fees (homeowners association fees) or the limitations that come with owning these types of residential properties.
I started to really think about the possibility of homeownership when I landed my first job right out of graduate school. After figuring out how much I could realistically afford, I spent the next two years living at home. I saved for a down payment and a few years later I became a millennial homeowner at the age of 26.
After owning a home for over a year now, it’s safe to say that I have learned a few things about buying and maintaining a house. With that being said, since I’m all for millennials owning instead of renting, here are some tips for successfully buying a house in your twenties.
Tips For Buying A House In Your Twenties
Finding the Right Real Estate Agent
Finding a real estate agent who understands your needs is extremely important. As a millennial, you want to find an agent that finds listings based on your wants and needs, and understands that sticking to your budget is non-negotiable.
Searching for your dream home may take weeks or even months so don’t waste time on properties that you cannot realistically afford.
Speaking from experience, looking at properties over budget may only leave you feeling discouraged that you can’t afford a nicer home in a better area. If it’s a financial no-no, do yourself a favor and keep it moving. Regardless of what anyone says, remember, you are on the hook for paying your mortgage, no one else. This goes without saying but your realtor is not a financial advisor.
To clarify, the right real estate agent is unbiased, honest and looks out for your best interest. He/she is proactive and isn’t afraid to negotiate on your behalf. They also update you regularly and they are really good at following up.
20% Down is a Myth
Owning a home is more affordable than ever before because you no longer need to put down 20%.
Of course with a 20% down payment you eliminate PMI (private mortgage insurance) but in today’s climate, you can get a mortgage without a large down payment or excellent credit.
As a first time home buyer, you may qualify for an FHA loan which is a type of government-backed mortgage where you can put as little down as 3.5% on most properties.
FHA loans are insured by the Federal Housing Administration and it’s an affordable way to help families finance a home. With an FHA 203 (k) loan, you can even borrow money for home repairs like heating and air-conditioning systems, flooring and more.
Everything is Negotiable
When buying a home, depending on the market, it is expected that you negotiate with the seller. Offer full price if you want to beat out the competition but generally speaking when it comes to buying a house, everything is negotiable.
Here are some of the things that you can negotiate:
- Purchase price
- Repairs – roof, plumbing, windows etc.
- Yard – landscaping, removing trees or bushes
When you’re negotiating purchase price, consider the cost of repairs and renovations.
In my case, since all the copper piping was missing in the house, after factoring in the cost of plumbing, I lowered my offer.
You Don’t Need A Partner
Don’t let the fear of not having a partner get in the way of you buying your first house.
Although two incomes is obviously better than one, if you’re nowhere near ready to settle down with someone but feel like you are financially and emotionally ready to buy a house in your twenties, don’t wait!
When I first moved into my house, some of my neighbors were surprised to find out that I did not have a husband or significant other. My response, I have a dog and that’s enough for now. Again, if you can afford to own a home and it makes sense, don’t wait on the potential of your relationship status.
As a single (unmarried) woman, I bought a house because I wanted to invest in my future and start building equity in a long-term asset that I can pass down to my children and grandchildren. Although there’s been a few bumps along the way, owning a home continues to be one of the best decisions I’ve ever made.
Thinking of owning a home? What’s your biggest obstacle?
Danielle is a travel finance strategist, writer, speaker and podcaster. She paid off $63,000 of student loan debt in 4 years, bought a house at 27 and has traveled to 25 countries. She refuses to let her financial responsibilities hold her back from living life on her own terms.