Back Home6 Tips for millennial homebuyers
As the largest living generation in the nation, it’s no surprise that millennials make up a significant portion of the real estate market. It is these same millennials who are jumping in and taking that huge step toward homeownership.
If you’re part of this exciting generation and you plan on buying your first home, here are the top tips to keep in mind:
Check your credit
One of the first steps to take in your home-buying endeavor is to look at your credit score and credit report. A good credit history gives lenders more confidence in your ability to repay the loan and allows you to qualify for a great mortgage rate.
Regularly reviewing your credit history will alert you to any errors or inaccuracies that you can fix immediately with the credit bureau. For a free credit report, you can choose from Equifax, Experian, and TransUnion.
A good credit score ranges from 670 to 739. Getting your finances in order is key to improving your credit score. A student loan, in particular, is a major factor that holds millennials back from buying a home. Paying this on time helps greatly in improving your credit score.
Start saving for the down payment
It’s never too early to start saving for your house’s down payment. The bigger the down payment you make, the smaller your monthly mortgage payments will be. You also get a better interest rate for your mortgage and more home equity.
A 20% down payment is an ideal amount to pay. That way, you can avoid paying private mortgage insurance (PMI), a type of insurance that could protect the lender but could otherwise translate to costlier monthly payments for you.
Hire an experienced real estate professional
Buying a house can be an intimidating and overwhelming experience, especially if you are doing it for the first time. That’s why it’s better to jump into the real estate market with an agent by your side.
A real estate agent can provide you with in-depth neighborhood and market knowledge that you can’t get anywhere else. An agent is also adept in navigating the home-buying process and expertly handling any real estate situation. From negotiating with the seller to reading the fine print of the purchase contract, your real estate agent takes care of the nitty gritty details for you.
Get pre-approved before house hunting
A mortgage pre-approval is an evaluation of your finances and credit history to determine the loan type and amount that you can qualify for. Being pre-approved gives you an edge over other buyers because it shows the seller that you are serious about buying their home. It also gives you more bargaining power and speeds up the closing process.
Apply for a mortgage pre-approval before you begin shopping for homes. You’ll have an easier time narrowing down your housing options because you know how much home you can afford.
It’s also wise to find a lender that you can trust. Shop around and talk to different lenders. An experienced and client-focused one will provide you with different options and help you make an informed decision.
Search for affordable properties
Mortgage interest rates continue to be at their lowest, making it tempting to purchase a property that exceeds your budget. However, it’s best to stick to a home that fits both your budget and your home-buying needs and wants. Shopping within your means gives you more room for other expenses and financial goals.
Understand the home-buying process
Buying a home can be a complicated process. From getting a mortgage to negotiating for a fair purchase price, there are plenty of aspects that you need to consider before you sign on the dotted line. That’s why it’s crucial to read up on the home-buying process and learn as much as you can.
Another aspect of the home buying process that you need to familiarize yourself with is the costs. Underestimating the costs associated with buying a home is a common mistake that new buyers make. Aside from the down payment, you also need to be financially ready for the closing costs, homeowner’s insurance, property taxes, and home maintenance expenses.
Let an experienced real estate agent guide you through the home-buying process from start to finish. The team of Berkshire Hathaway HomeServices Caliber Realty can work with buyers across all age groups and help them find the best property to live in.
Start buying a house in Texas today! You can reach the team by calling 979.694.8844 or by sending an email to sales(at)bhhscaliber(dotted)com.
