Did you know that Millennial buyers now make up the largest group of homebuyers in the country?
The good news is that this is an excellent time to buy a home. The growth in home prices is slower than it’s been in recent years.
In some states, like New Jersey and New York, housing market prices have dropped as much as 6.2%.
Are you ready to begin the search for your first home? Read on for our home buying guide designed just for you.
1. Starter Home or Forever Home?
Before you begin searching, you first need to establish your priorities.
Are you hoping to buy a home you’ll live in for a long time? Would you like to have it paid off by the time you hit middle-age so you’ll have fewer expenses going into retirement?
On the other hand, maybe you’re just looking for a starter home to keep for 5-10 years while you build a little equity. In that case, the exact size, condition, and neighborhood may not be as crucial as a home you hope to retire in.
2. Pay Down Debt (And Save)
If you’re like most Millennials, you probably have some student loans and other debts.
While you may not be able to get debt-free, now’s the time to set a budget and pay down as much as you can. Focus on car payments and credit card debt first. And be sure not to miss any payments, as this can significantly impact your credit rating.
You’ll also need to stash some cash away for a down payment and closing costs. 20% is the ideal goal, although you may be able to qualify for a loan with as little as 3.5% to put down.
3. Get Pre-Approved for a Mortgage
For the majority of buyers, pre-approval is a huge step towards homeownership.
For one, it shows sellers and realtors that you’re serious about buying and you’re financially able to do so.
Second–and perhaps even more important–it tells you how much house you’re able to afford. This helps you set a budget and prevents you from considering homes that are out of your price range.
4. Find a Good Realtor
Some people believe that realtors are only there to help home sellers, but that’s not true.
Your best bet for finding the perfect home for you is to enlist the help of an experienced real estate agent.
They understand the local market and will work with you to find a home that suits your needs–while remaining within your budget.
Myths vs Facts of Homebuying
Before we conclude, let’s clear up a few common misconceptions about buying a home.
- Myth: You need perfect credit to purchase a home.
- Fact: There are many programs to accomodate bad credit situations even with scores in the 500’s. One common example is paying a larger down payment to get approved for the loan, and seeking a “sellers concession” to handle closing fees.
- Myth: You should find the home you want before applying for a loan.
- Fact: Get approved for a home loan FIRST so you can look for homes in your price range.
- Myth: It’s cheaper to rent than it is to buy.
- Fact: The housing market has changed in recent years, which makes buying a home the logical and economical choice in most areas. In many cases, monthly mortgage payments are LESS than monthly rental payments.
Do you have more questions about buying a home? Contact us anytime with your thoughts!
Your Home Buying Guide: Final Thoughts
With the current housing market, now is the perfect time to set foot on the path towards homeownership.
Refer back to this home buying guide often to ensure you’re staying on track. Who knows? Your dream home could be right around the corner.
Ready to begin your search for a New Jersey home? Click here to get started.
Happy house hunting!