Young adults must start planning to buy a home as early as possible to cover all their bases. Buying a home will require them to pay a down payment, have great credit, and a stable work history. They must also be able to afford the loan payments and insurance. Reviewing tips for young adults shows them how to plan for a future home purchase.
Generate Savings Now
Generating savings as early as possible helps young adults get up the capital they will need to buy a home. On average, the down payment for a home is around 10% of the total mortgage loan value. Setting up a whole life insurance policy while they are young could help them generate savings for a down payment in the future. Defining a budget and placing some of their earnings into savings can also help them save a bundle.
Monitor Your Credit
Monitoring their credit helps young adults determine if they have the right credit scores for their preferred mortgage home loan. IF they haven’t established credit, this is a must before they can get a mortgage home loan. Opening up a line of credit and keeping the balance low is a great way to establish credit and show a lender that the young adult is creditworthy. A credit card account is a great way to establish credit if they control how much they spend and keep the payments current.
Increase Your Earnings and Establish a Lengthy Work History
Changing jobs as they advance in their career can help the young adult earn more and qualify for a mortgage home loan. They will need to stay on their current job for at least two years before applying for a mortgage. Lenders want to offer loans to borrowers with a steady employment record. This shows them that the borrower has the ability to pay the mortgage and won’t face foreclosure.
Compare Homeowner’s Insurance Policies
Comparing homeowner’s insurance policies helps the young adult determine how much they will pay each month for coverage. Reviewing their budget for buying a home helps they determine how much the property of interest will cost. This gives the insurers a base value for a home and give the young adult a more accurate quote for their insurance. If the property is in a flood zone the buyer must also purchase flood coverage. Comparing the cost of both policies and the projected mortgage payment tells the buyer when the best time for them to buy a home is.
Get an Approval for a Mortgage
Getting an approval for a mortgage shows the borrower how much they can borrow based on their income and credit scores. The approval is helpful to real estate agents helping the buyer find a home.
Young adults need to start saving for their down payment right now. There are several ways to achieve this goal and have enough when the time is right. Reviewing loan programs helps them determine if they qualify for a preapproval. Young adults who want to make a plan for buying a home can start by going to NRIA right now.