The millennial generation has had a major impact on many areas of the economy, including house hunting, and will likely continue to do so in the future. In fact, it has been estimated that as many as 33% of all homes bought in 2017 will be bought by people between the ages of 21 and 37. For those millennials who are entering the housing market, there are four steps that should be taken to ensure a proper budget.
The first thing that a millennial should do when they’re house hunting is to develop a budget. Buying a house is a major decision that should not be taken lightly. When thinking about buying a new property, you should try to find a property that would result in your total housing payments being less than 30% of your gross monthly income. This should include your mortgage payment, property taxes, PMI, and insurance. Furthermore, if at all possible, you should try to save up for at least a 10% down payment to minimize the PMI requirements. If you do not have the budget yet, don’t feel rushed. Save up for a few years so that you’re able to afford it. After all, you need to make sure that you have enough to live off of from your budget and that it’s not 100% going to bills.
Find a Mortgage Lender
When looking for a new home, the next step is to speak with a mortgage broker. A mortgage lender will be able to review personal financials and explain how much of a mortgage you will qualify for. The mortgage lender could also provide a pre-approval letter, which will be necessary when bidding on a new home.
House Hunting Search
When you are looking to buy a property, it is also important to search for as many homes as possible. Online real estate websites can provide you with a lot of data about current listings. However, it would also be a good idea to hire a realtor to set up showings and handle any negotiations during your house hunting process.
Consider New Construction
Millennials that are starting to look for a new property should also consider getting a new construction home. New construction homes often come with less maintenance requirements and can even allow a buyer to custom choose many of its features. These, and other benefits of buying a new property can make it ideal for a first-time home buyer. Just make sure that you’re thinking about adding things that add to the value of the home just in case you decide to sell it later on.