When it comes to millennials, the term “homeowner” is rarely the first descriptive that comes to mind. But it’s not because millennials, in particular, don’t have the necessary means to buy a home. It’s mainly due to the fact that most millennials truly believe they can’t afford it. Between student loan debt, mediocre credit and the occasional need for installment loans to fill unwanted payday gaps from their low-income jobs, it’s hard to disagree with them. But the fact is, it’s not impossible for millennials to become homeowners. For those who still have doubts about it, here are just a few home-buying tips to help millennials buy their piece of the American dream:
If you ever want to move out of mom and dad’s house, you need to start saving now. But if debt is what’s keeping you from saving, consider David Ramsey’s “Snowball Effect.” The idea is simple - start by paying off your smallest debt, then work your way up from there. It’s a lot easier to conquer small debts than to start off with the giant ones. Your little victories will give you the motivation and financial momentum you need to keep going until all your debt is paid down. Once you’re debt free, you can switch gears and start moving that extra money into savings.
One of the most important steps in buying a house is having your finances under control, and the easiest way to help you accomplish this is to create and adhere to a budget. More specifically, a budget that’s tailored to match your income to your spending habits. Creating a budget isn’t as complicated as you may think. Simply calculate how much you earn each month, then stack up all your necessary expenses against your income. The money you have left over is where you’ll decide what you can save and what you have available for discretionary spending. By budgeting your income, you’ll have full control over where your money goes, making it much easier to save for your dream of home ownership. Budgeting is the cornerstone to good money management.
Buying a home isn’t as easy as picking out a house and signing on the dotted line. Before you’re ready to buy a house, you’ll need to get a few things in order first; a mortgage loan, money for a down payment and someone to help you find a house that fits your needs and budget. Fortunately, there are programs available through participating banks that cater to the unique needs of first time home buyers, and real estate agents are more than happy to help. Ask around for assistance to get the ball rolling. Believe it or not, there is an abundance of professionals who’s job it is to help you navigate the home buying process. Suddenly, buying a house doesn’t seem so impossible anymore.