Rent prices increased an average of 3.6 percent in 2014 and nearly 11 percent over the last three years, according to REIS, Inc., a leading source of real estate data. It makes sense to begin the real estate investment as soon as possible for many reasons including the equity gained and pride in home ownership. Here are four steps to owning a home in your twenties.
Step 1: Talk to a Lender
Talking with a lender will help you understand the mortgage you can afford. A simple twenty-minute conversation looking at your income and monthly debts will help you determine what loan you will pre-qualify for. Additionally, most realtors won’t start showing you homes until you know what you qualify for. You don’t want to fall in love with a home only to find out you can’t afford it!
Step 2: Determine a Budget
Just because you were approved for a $300,000 loan doesn’t mean you need or want to spend that. Talk with you lender to understand what the mortgage payments will look like month to month and determine what you are comfortable spending.
Step 3: Find a Realtor
Interview and speak with several real estate agents before you decide on one. Choose someone you feel comfortable with and trust. Pick someone who is dedicated to helping you find your first home. If they don’t seem available in the beginning of the process, can you count on them to be there at closing when documents need to be signed?
Step 4: House Hunt
Once you have selected a realtor, go tour some homes! Look at new construction homes and older homes to determine what characteristics you like. Narrow down your preferred location so your realtor can find your ideal home.