Buying a home in your 20s
Posted: Jun 10, 2019
Buying a home early in your life brings a lot of joy and a sense of accomplishment for you. We all know that investing in real estate is an involved challenge. It takes years of saving and patience to meet the financial needs of home buying. Buying a house is the most expensive investment and in order to do it, smart financial management is necessary. If the process is managed wisely, the home you are waiting to buy later down the line could be yours within a few years.
Certainly, making such investments earlier will give you higher chances of reinvesting and doubling the returns. Buying a home early has its own benefits. Some of them are:
Future investment: The house is the biggest investment that not only provides a roof over your head but also opens the door to future investments in case you are willing to move on after a couple of years.
Better spending habits: The decision-making process is reconstructed when young buyers learn to invest smartly and to save & spend wisely.
Tax benefits: Young homebuyers are eligible for better loans and tax benefits. They can also enjoy the fruit of extensive capital gains.
It is not only about saving funds for the property but also planning a budget that is affordable. It should correspond to your career growth and earnings as well. The important point here is to make the right buying decision, save at least 20-25 percent of the value of the property before buying and the rest could be from a home loan. It is also essential to maintain sufficient balance for any emergencies and other necessary expenses which is similar to crossing a two-way street after watching both sides. Youngsters are more eligible for a bigger loan depending on the value of the property. Banks also allow a longer tenure for the repayment of the loan in monthly installments.
There’re a few points for a young buyer to keep in mind when looking to buy a house:
Planning: One should consult for opinions from different banking institutions to know more about the process of home loans including documentation, rate of interest, repayment tenure and more.
Location: After a long day at work, long commuting can become frustrating. So it is crucial to choose a location near your workplace. It can help in saving time and efforts, thus, maintaining a healthy balance between professional and personal life.
Guidance: A young novice buyer needs extra guidance when it comes to buying a house. Many legal contexts such as land titles, approvals, compliances, housing benefits, government plans, etc can be easily understood with the help of a consultant or expert.
This perfectly laid out plan can work in your favor if a financial discipline is maintained. Try not to shift your focus towards any sort of unnecessary expenses. Try to give precedence to savings and asset building. If followed properly, a young buyer could become a smart real estate owner.
Even though everything works out the way we want, there is something that needs our attention. It is the Down Payment, something that we know about which becomes a major financial burden on most of us. Remember the above mentioned 20-25 percent savings? Yes, those savings would fuel your home down payment needs. This may prove as the biggest hurdle between the buyers and their home. Not having enough funds means that homebuyers would turn to find cheaper options or live in rented accommodation for longer than planned.
- s Down Payment Assistance Program can help you overcome that hurdle and be one step closer to your dream home. This program offers a first time home buyer no-cost down payment assistance in the form of interest-free credit equal to the buyer’s contribution towards the down payment. The assistance is repayable in equal monthly amounts without any form of fees or interest. This unique program allows you to buy your house today without the need of waiting years to generate savings.
Buying a house is a huge responsibility but if done correctly, then, you can become a homeowner in your 20s!