There are a lot of millennials out there. There’s 90 million, to be exact—with over 20 million owning a household in 2014. That’s 30 percent of millennials becoming homebuyers. While that fraction doesn’t seem like much, it’s important to note that young adults are moving on up in the world. Not everyone wants to be a renter forever. Some are ready to buy now, and those born between 1981-2000 will continue to get that much older and that much more financially stable.
If you’re ready to purchase a home, then this guide is for you. Here’s a guide to home ownership for the young adult, courtesy of Money Under 30.
Ask Yourself: Are You Ready?
The very first thing you should do is ask yourself a bunch of questions in order to determine whether you’re truly ready for this type of commitment. Don’t just buy a home because it’s a buyer’s market or because of low mortgage rates, and definitely don’t buy a home just because everyone else is doing it. You have to make sure you’re in the place for it. Buy a home because you want to be a homeowner, and you’re ready to settle down for awhile.
The bottom line? Only buy a home when you’re financially ready.
Determine How You Will Pay for It
The next step is determining how you’re going to pay for it. For most of us, a home is the most expensive thing that we’ve ever bought. And to make that purchase, you need a big loan—a mortgage. Mortgages are no joke, and if you can’t afford it, your outlook for owning a home is looking bleak.
To pay for your first home, you’ll need a few things: good credit, a steady job and a sizeable chunk of cash for a down payment. You’re also going to want to think about all of the secondary costs of home ownership: homeowners association dues, furniture, upkeep, maintenance, and homeowners insurance, to name a few. Home financing is difficult, but it doesn’t have to be impossible.
The next part that has to get done is pick out a home to live in. Shopping for your dream home can be both an ethereal and stressful experience. It’s going to take some time, so get ready to go through more than one home. And get ready to pick each home apart with a fine-toothed comb. Have your questions ready for the real estate agent. No question is too stupid or too irrelevant; you could be living in that home, and you should be comfortable with everything about it.
Seal the Deal at Closing
It doesn’t stop at getting the mortgage and finding the house. Next you have to seal the deal at closing. There’s a lot more to the home-buying process than you might think. It’s going to take some negotiations first until you finally win the right bid on the perfect home. If it doesn’t work out the first time around, don’t get discouraged. Learn from the previous negotiation and move on to the next prospect.
Find the Right Homeowners Insurance
No one wants to think about a disaster striking their home (especially when they haven’t even purchased the home yet), but it’s crucial to always be prepared for anything. Make sure to talk to your insurance agent to get the best-suited homeowners insurance coverage for your California home. If you’re worried about the cost of insurance, don’t fret. There are ways that you can reduce your premium, and a good insurance agent will be able to thoroughly explain your options to you. Don’t just go with your first option; like shopping for a home, shopping for home insurance is a detailed process, and we recommend thoroughly asking questions before making your purchase.
About ISU / The Olson Duncan Agency
At ISU-The Olson Duncan Agency, our goal is to provide clients with a total solution, not just a quote or a contract. We provide businesses and individuals with insurance and risk management solutions, and we aim to provide real value and build trustworthy, long-term relationships with our clients. To learn more about our services, give us a call today at (310) 373-6441 to speak with one of our professionals.