Buying a house is always a large commitment, no matter what age. However, in each stage of life, buying a house can mean different things. It an be your first, your last, your family vacation home. So we decided to put together a series of posts on tips to buying a house at various life stages: first home, growing families and empty nesters. We know there are other stages to life, but these are the ones we are talking about.
Today, we talk about the first home.
This mostly likely comes in your 20s when renting seems annoying because you can’t have a pet, you can’t paint the walls and there is always an annoyed neighbor when you have a cook out.
Be prepared upfront
Buying a house isn’t something you do on a whim. If you really want a home, you are going to have to put a lot of money up front. Save like crazy and spend frugally. It will cost you money, and you’re going to be hurting if you don’t have some money set aside in a savings account.
Stick to a budget
Regardless, a first home is all about what you can afford NOW. You might still be starting on the lower rungs in your job/career. Know how much you can afford each month and still be able to pay your college loans and still pay for mortgage insurance, home insurance, HOA, and other added costs. Once you determine how much your principle and interest will be each month only, then determine how much house you can afford for that amount.
Be flexible with your wish list.
A three-story house with a theatre, four bedrooms, a master suite sitting on three acres is a wish list for a first-time home buyer. It is something to work up to. Just like anything worth it in life, it takes time.
If your budget is small, you might not get that house with the fully updated kitchen and jacuzzi tub, but if that is really important to you, know what you will compromise on. Keeping your demands simple will increase your options.
Most people in this life stage have a small budget that will come with some, let’s just say, things in a new home. It may need new carpet, some love for the brown yard or only have a one-car garage. You have to be willing to live with or fix those things or compromise.
Know your future
The thing to keep in mind is that many people move, on average, every six years.
Many older generations lived their entire life in one home. Many of us 20-somethings were raised in one home and would like that same feeling, however, that’s just not the norm anymore.
You may be single and ready to have your own space, knowing you will sell once you find a mate. You may be with someone, but nowadays most couples put a (key) ring on it first. You might be married looking to build some equity for a nicer home once that oven starts cooking.
If you are only going to be in the house for one to three years, think about if it is really worth it to 1) buy the house or 2) move out of it so quickly. If you buy that fixer-upper but don’t finish the job before you want to move out, than don’t put yourself through paying the costs of purchasing (and selling) a home if you’re not going to be there long enough to reap the rewards.
Let us know.