When you headed into your twenties, I bet you were thinking about all the goals and options you had ahead of you. It’s an exciting time; you’re no longer a “kid” and adulthood so far has been filled with adventures and opportunities. But, believe it or not, one of those opportunities should include buying a house. Yes, you heard me right…you should be thinking about buying a home.
Homeownership is not just something for your parents anymore. I’ve entered into my forties, and let me tell you, all the people I know who bought a home in their twenties are now incredibly wealthy. So, here’s how you can pull off buying a home today and setting yourself up for the future.
Don’t Get A Job, Get A Career
Income Plays A Huge Role
There’s a temptation after high school and college to take the first opportunity that comes your way. Don’t fall into this trap! You worked hard in school, so set your sights higher! Income plays a huge role in getting a home. To get an idea of what loan amount you might qualify for, take your monthly gross income for the year and multiply it by 3. So, the more money you make, the more house you can buy.
Didn’t go to college? Don’t sweat it! Higher education isn’t a requirement for a homeownership, but you might want to look into a career or trade that will pay really well. Real estate, insurance sales, and other sales related careers can help you bring in a decent salary.
Don’t Get Caught Up In A “Lifestyle”
Don’t Waste Money
Many ads and marketing campaigns out there are targeted to get a person like you to purchase things that will set you back from buying a home. Let’s take electronics, for example. Every year, Apple comes out with a brand new iPhone that promises to be even better than the latest version you bought last year. This is also a trap! Don’t upgrade your technology unless you absolutely need to.
Another lifestyle choice that can drain your bank account is housing. Don’t waste your money on expensive rent for an upscale apartment or house. Why give them all your money when you could be putting that money towards a new home that you own? When it comes to rent, try to stay around 30% of your income. And pick up a few roommates if it’ll help you save money for a down payment.
The Sooner You Buy, The More Money You’ll Have
Most people look at a house as a huge expense, not an investment opportunity. If you ask your peers about buying a home, they may warn you about becoming “house poor.” Being house poor means all your money is going into maintaining a home that you can barely afford. But, if you follow the right plan, you won’t have to worry about that.
- Whenever you look at homes online, remember that you’ll need about 10-15% for a total down payment which includes savings, inspections, appraisals, fees, and options.
- Start your home-buying process by getting pre-approved by a loan officer or mortgage company.
- Pick a great realtor who is knowledgeable and isn’t afraid to work on your behalf to get you the best deal.
- Don’t settle for any house; take your time to find the right one for you.
Once you buy your home, it will start to appreciate in value. Your credit score will go right up, and you’ll have a “prepaid” savings account (when you sell your home, you’ll make money).
There’s still more to cover! This article only covers a few things to think about regarding homeownership in your 20’s…but there’s still more to discuss. Give me a call, and let’s talk about it!
So, connect with me via call or text and let’s get you on the path of homeownership! Oh, and don’t forget to check out my Friday show “Lunch With Mark” on Facebook, hosted by Codemark Financial. Until next time!