Learn Home buying best practices for your 20s, 30s and 40s with our handy guide that was created with YOU in mind!
What you will need from a home will evolve as your life changes. While you can’t predict the curve balls life throws at you, you can read up on best practices to be fully informed and be aware of home buying best practices.
Real estate advice for 20-somethings
Have a plan. Start off by setting aside money to save first, and then pay your bills. The rest can be considered your “fun money’. If you are finding yourself having less money for fun, then try to cut back on your bills or find a way to earn more money. Once you’ve saved around $5,000 to $10,000, it’s time to stop renting and get in the mindset of a first-time home buyer. Check out the loan options you have and then find a locally trusted real estate agent who knows how to get you into the home of your dreams.
Conquer your fears early on
As a first-time home buyer, it’s important to complete a pre-qualification early on to determine what you can afford. It makes sense to evaluate more than one loan option to ensure you are getting the best rate, also considering the length of time you plan on staying in the home. 30-year fixed rates are the most popular, but if you plan on being there for less than 10 years an adjustable-rate mortgage might be better for you.
Check your credit
One of the most important things to do months before you buy a home is pull your credit report. The worst thing you can do is to wait right before you are ready to buy to find out your old collections and debts are ruining your credit. Many younger and first-time home buyers don’t consider checking their credit, but it may save you some headache when it gets to be crunch time.
Consider a new-construction home
New homes are ideal for younger home-buyers because they require less maintenance and should not need any major improvements for years. They are also more energy-efficient which will save you on monthly bills. In some instances, builders can offer to help with closing costs and have various financing options with your preferred lenders. But, there are other benefits too. Your homeowner insurance may be cheaper as well.
Make sure you have a savings
In your 20s, saving for a down payment can be a strain. Between an average paying job and student loans it may seem impossible. And the additional cost of homeownership: furnishing, lawn equipment, and maintenance. It’s important to understand these costs and plan in advance for them. One option is to ask the seller to include a home warranty. This will eliminate you having to get one so you can have more money in your pockets. For the first-time home buyer, it’s important to know what a home warranty covers what home insurance doesn’t’: the repair and replacement of home appliances.
Ask yourself: “How long do I plan on staying in this house?” Experts suggest staying put for at least five years to build equity and gives your home time to increase in value.
Advice for 30-somethings
Reevaluate your priorities
Upgrading to a larger home is often a priority for the 30-something homebuyer. You more than likely have a spouse and children, which requires the need for additional room. But don’t just think about the space you need. Consider school districts, home buying best practices, quality of life and ease of access to major transportation and amenities. Be sure to use caution when going bigger. Just because you can afford to move doesn’t mean it’s always the best decision for your budget and family. Even if you are a ’30 something’ our home buying best practices guide was created just for you and not just for millennials.
Don’t over improve your home
When purchasing a home with needed upgrades, be careful not to over improve for the neighborhood. The additions may look nice, but buyers will not pay for them beyond the value of the area.
Time your home sale
Buying and selling a home simultaneously can be a scary test. Timing is an important factor and having an experienced realtor will be valuable to ease your mind. You may get lucky and negotiate on a deal that gives you time to vacate your home after selling. This will certainly make the moving process easier.
Advice for 40-somethings
Focus on your lifestyle
Buyers in their 40s have tough decisions depending on what stage they are in their lives. The spectrum of lifestyles can depend on marital status, children in the home and finances. Your real estate decision in your 40s should reflect your current needs. If you have teenagers in the home, consider a smaller home, as you may be having an empty nest sooner than later.
Don’t assume it’s too early to downsize
If you have young children, this may not apply to you, but for many 40-somethings, an empty-nest is right around the corner. A lot of people at this age are consumed with life activities and don’t want to be bothered by a lot of home and yard maintenance. Downsizing will result in lower mortgage payments and expenses. This will free up money for alternative lifestyle upgrades, traveling, and retirement savings.
Get serious about paying off your mortgage
Short-term loans are more appropriate for those in their 40s and beyond. If most of your major lifetime expenses are behind you, it makes sense to start paying off your home sooner. However, try not to forget the tax benefits having a mortgage can offer. Be sure to speak with your loan officer to find out the exact benefits of paying off your mortgage early. In some cases, it may not be as suitable for you as you think but as long as you follow our home buying best practices you will be well on your way to getting the deal of a lifetime on your new home!
Consider investing in other properties
If you can afford to buy a second home in a nice area, renting it out can generate income and an opportunity to vacation in the home yourself. With websites and social media, managing and marketing a vacation home is easier than ever. But, don’t take on another property if it means less money towards your retirement funds.
At any age it is important to know what to and what not to do when it comes to home buying. Consider where you are in your life at this moment and make that your basis for the decision on when, where and how to buy a home.