Top Tips for Buying Your First Home in your 20s

Jan 27, 2021 | Mortgage


The lenders at EPM specialize in helping first-time buyers become proud homeowners. With that said, there are some tips to make the task more accessible and less stressful for you. There is no reason you can’t find the perfect home in your 20s, but we’ve got some special considerations for you so you don’t end up with buyer’s remorse down the line.

It takes a lot of planning, a lot of commitment, and a little extra time. But we’ll help you make the smart decisions you need to get into a great home.

Tip 1- Get Real With Your Budget

 You need to take a hard look at the actual numbers here. You can do some research and start planning your budget yourself, or you can consult a qualified financial planner to help you meet your home buying needs. Let’s be clear- No matter what, this is going to take planning and a realistic look at your specific needs. Don’t gloss over this part and assume your finances are fine. You really want to do it right the first time.

A big mistake people make is talking to a lender first to see what kind of home cost they pre-qualify for. That number doesn’t take into account your other daily expenses and you could- and likely will-end up with more house than you can actually afford if you don’t make a plan.

Tip 2- Get your Credit Score in Great Shape

Again, this is going to take some planning. Building good credit is a long term investment that pays off HUGE when you do it wisely.

Great Credit will help you get the best interest rates for your future mortgage. If you aren’t already doing so, you’ll  want to monitor your credit score so you can build it up as high as you can. You’ll also be able to monitor it for fraud or mistakes in your credit report. There are tons of free programs and apps that will let you check your progress for free anytime you want. You might also consider investing in identity theft protection to make sure your good credit doesn’t get into somebody else’s hands

Building credit in your 20s can sometimes feel tricky to manage with all the options for buying and spending your hard-earned money.  But it really comes down to keeping your credit limits practical, and  making sure to pay off your balance each month. If you can’t pay the entire balance, make sure to keep your overall credit use lower than 30%  of your limit.

Set up recurring payments– You want a pristine payment history and even a few missed or late payments can affect the way your score looks to lenders. Don’t forget to do this with your student and auto loans too.

When you do go to a lender, prepare for the hard inquiry on your credit score. This isn’t necessarily a bad thing, but too many hard inquiries  will affect your score and may look like you pose too much of a risk as a borrower.

Tip 3- Research the Market in Different Areas

 Housing costs can vary from neighborhood to neighborhood even within the same town or city. You’re going to want to be flexible and practical about what your needs really are. You may think you want a specific type of home at a certain price point. You might consider a trade-off to live in a different neighborhood with more amenities that fit your needs, and downsize your home a bit. With enough research you can find the right fit in both arenas

Give yourself a chance to shop around. Hit up open houses, not with the eye to buy, but with research in mind. You may come up with questions, ideas, deal makers and breakers you hadn’t thought of before. It will help you zero-in on what you truly want, and make it that much easier to pull the trigger when you find the perfect home for you.

Tip 4- Consider the True Costs of Creating the Home You Love.

There are a lot of other costs outside of your mortgage that you’ll need to add to your budget. Extra housing costs include insurance, repairs and maintenance costs, emergency costs utilities, HOA, and PMI( private mortgage insurance). Trust us when we tell you there WILL be unexpected costs you need to figure in. Have some funds set aside to prepare for your basement to flood, your fridge to go on the fritz, your pipes to need plumbing, or your internet costs to rise- and you will save yourself a headache down the road.

It’s fun to think of all the amazing ways to decorate and even renovate your new home to make it all yours. Make sure you have a strong idea of how much that will cost you- and consider the projects that must be done now, and those that can be pushed further down the road. You  also don’t have to buy everything new to make sure your house has character and style. You can get great items at flea markets, yard sales, and Facebook sale groups.

Whether you’re planning for DIY renovations or you want to pay a professional, make sure you do your research and really understand what it entails, where you can and CAN’T cut corners, and how not to get taken advantage of.

When it comes down to it. You’re going to need to plan for the big picture. Don’t rush it, and prepare for your plans to change. Going into this process well-prepared can make all the difference in finding the perfect home for you.

Did you check out these tips and feel like you’re personally and financially prepared to take the leap? Contact a trusted lender at EPM today and let us help make it happen!