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According to a report published by the National Association of REALTORS®, millennials made up 38% of the buyers' market in 2020, the highest share of any other generation. It's no surprise that millennials-the generation born between 1981 and 1996-are attracted to homeownership, with the ability to build wealth over time, ditch rental payments, and put down roots in good school districts for their young children.
If you are a millennial ready to take the home buying plunge, we've put together a guide with seven tips to help you walk through what to do and expect.
1. Decide if the Timing is Right.
There are many factors to consider when deciding if it is time to take the plunge and buy your first home, such as whether or not you plan to stay in one place for more than five years and if you are prepared to buy a space that can change with you and your family over time, instead of a trendy, one-bedroom condo. If you are renting and going over these possibilities, you can check out our full blog on renting vs. buying here to go through a simple checklist. Bottom line, buying a home takes away the flexibility to move anywhere you want after your lease is up and requires long-term thinking about all the ways your life may change over the next few years, but the results are extremely rewarding.
2. Tackle Debt.
While many millennials are bridled with student loan debt, you don't have to pay off the entirety to purchase a home. Lenders want to see that you have paid down your debts consistently over time, so that you don't look like a risk liability. In the months prior to buying a home, prioritize handling your bills on time and try to pay down student loans, car payments and credit cards. Lenders will also look at your income-to-debt ratio when considering all of these factors.
3. Save, save, save.
While a down payment seems like the most significant cost involved in the home-buying process, there are other payments that might sneak up, such as closing costs and home inspections. It is important to set a budget early and stick to it, so that you are prepared for anything that may come up. If you are stressing about how much you should put down for a down payment, you can check out our blog on the topic here.
4. Get Pre-Qualified.
This year, many homes were sold within days of hitting the market, meaning it is important to get the mortgage process underway so that you can act the moment you find your dream home. While going through the pre-approval process provides a quick look at your financial situation, getting pre-qualified for a mortgage requires a loan officer to look over all your paperwork and gives you a budget to work with when looking for a home. Metro Brokers Financial can help you work through the process so you can start home shopping.
5. Separate "Must-Haves" from "Would-Be-Nice".
Going to tour homes is one of the most exciting parts of the home-buying process, and it's important to make a list of your "must-have" home features before you even get started. These should be home features that you absolutely will not compromise on, such as a backyard if you have a dog or distance from a busy street if you have small children. Keep in mind while touring homes that "would-be-nice" interior features such as backsplashes and flooring can be changed, and focus on finding the necessities.
6. Be Affordable, but Play it Safe.
According to a recent poll, 68% of millennials said they would buy a fixer upper that needed extreme renovation. If you find yourself settling for the most affordable home on the block, keep in mind that repairs may cost you significantly more in the long run. Be on the lookout for sinking floors, mold, odors and other red flags. (Check out our blog on fixer uppers here for the full run down on determining flip from flop). It may be a better idea in the long run to purchase a home with fewer surprises and less changes to be made.
7. Take Your Time Working with a Real Estate Agent.
If you don't fall in love with the first few homes you go to look at, that's okay. Remember, you are making one of the largest purchases of your life. Take your time with each home and work with a real estate expert that knows the neighborhood. As a first-time home buyer, it is essential to pair up with a good real estate agent and turn the entire process into an experience you can learn from until you find the home that is perfect for your needs.
If you are looking to buy in metro Atlanta or north Georgia, we have you covered. Visit our home buying guide to see the steps our agents will help walk you through and get started connecting with a home buying expert in your area.