Buying a home is the American dream, right? So after seeing your parents, grandparents, and maybe even some of your friends buying homes you may be starting to get an itch of becoming a homeowner yourself. But how can you successfully navigate the housing market?
We’ve listed a few tips that millennials should focus on if they have goals of landing home ownership.
Manage Your Student Loans
One of the biggest downfalls for millennials is the average amount of student loan debt they face. Depending on how much debt you owe in relation to schooling, it’s important that you aren’t just paying the bare minimum on them. Your ultimate goal should be to pay off your student loans as soon as possible.
This is due to the debt to income ratio that these loans affect. The higher your ratio, the less likely you are to be approved or the worse off your loan.
But what if you can’t pay off your loans right away? Well, that’s not entirely uncommon. Your best bet may be to consolidate your loans depending on the interest rate they are currently sitting at as it’s likely you can find a better one.
Start Saving Now
Did you know that you are generally required to put down anywhere from 3.5-20% of the purchase price of a home? If you are looking at a home at the current average price of around $300,000, you are looking at putting a down payment of $10,000 to $60,000.
Do you have that in your savings right now? If the answer is no, then your next focus should be to start saving up so you can meet your goals of buying a home.
Boost Your Credit Score
A crucial factor is being approved for a mortgage loan is your credit score. It’s recommended that you have a score of at least 620 to consider buying a home. Anything higher than that and it’s just better news for you.
If your score isn’t hitting that mark, it’s time to put your efforts into raising it. Ways to raise your credit score include being on time for any scheduled payments, paying off as much debt as possible, and avoiding additional lines of credit.
Knowledge is vital in the housing market. If you are clueless on how the process of buying a home works, you’re going to have to do your research. Going into the home buying process blindsided is a recipe for disaster.
Start by building a base of knowledge on information like how to become pre-approved for a loan, how the home buying process works, and the process of closing on a home if you are looking to be a competitive home buyer.
After you’ve completed your research and are ready to take the next step in purchasing a home, the fun part begins. Begin your house hunting efforts by checking out Knoxville real estate for the perfect starter home in a city with tons to offer, especially for the millennial crowd.