The world economy has improved somewhat following the Great Depression of 2008 and the housing market is one of the sectors that have seen an upturn in fortunes as a result. For most people, buying a house has been increasingly becoming out of reach but as the economy improves more young people in their 20’s with a steady job can actually start turning their thoughts to moving out of their parents’ home. As a result, the housing market has benefitted from millennials steadily growing to become the largest group of homebuyers.
But how do you go about securing your first step on the housing ladder as a young person moving out of the family home and buying your own house for the first time? In recent years millenials have faced a unique set of challenges as a group, but securing your very own home is still possible. Because of their rising influence on the housing market, Millennials are the most vulnerable for landlord fraud so it is also crucial to remain vigilant during the home buying process. Listed below are 7 tips for Millennials looking to get onto the property Ladder to help you in your quest:
Getting your Finances in Order
Apart from the obvious but important reason of knowing how much you can afford for a rental property or to secure a mortgage, getting your finances in order is also crucial to ensuring you are able to maintain such a significant commitment in the long run. Even if a review of your incomings and outgoings shows you are unable to move just yet, a clear picture of your finances will help you to plan towards moving into your own home and give you the foundation required to do so.
1. Plan Your Budget
The first step in getting your finances in order is planning a weekly or monthly budget depending on how you get paid. As mentioned above, budgeting allows you to have a clear picture of the state of your finances, helping you to see how much you have coming in, going out, and crucially how much you can afford to put aside as savings, rent, or mortgage payments. While this may seem like an obvious thing, the crucial tip here is to make an honest assessment of your financial situation. Include all your incoming wages as well as outgoings like student loans and utility bills.
2. Pay off High Interest Debts and Start Saving
Once you have a clear picture of your finances the next step is to target any high interest debts you may have as well as creating a savings pot dedicated to your property ambitions. High interest debts such as credit cards or car loans can make a significant impact on your finances and it is a good idea to get rid of these to establish a firm financial foundation. Paying off debts and bills in time also helps to improve your credit rating which will come in handy when applying for a mortgage.
In the same way, your budget in tip 1 above will give you a clearer picture of how much you can put away as savings for your new property.
3. Decide Whether to rent or Buy
Getting your finances in order is also crucial in your planning and decision making when it comes to getting on the property ladder. As you clear any debts and start saving it will be clear how much of your income you can afford to put aside for a property. Most mortgages require at least a 20% down payment which is can be your guide to the type of property you can afford and also as to whether it is feasible to rent or buy a property.
When coupled with expert advice on how to avoid landlord scams, these first three steps in preparing yourself financially are a great way in setting goals for joining the growing ranks of millennial homeowners.
Finding the right Property
When it comes to finding the right property the do-it-yourself approach of modern lifestyles may not be the best way to proceed in getting on that first step of the property ladder. Here are some tips to help you find the right property:
- Decide on the Location: Even before starting to look for a property in earnest, most people will already have an idea of their preferred location to live in. Once again your budget and savings will determine where you can buy or rent a house as this is one of the biggest factors in the value of any property.
- Always plan ahead: Remember to plan ahead by always considering important factors such as resale values or the availability an proximity of services such as schools and other facilities.
- Choose the right Estate Agent: First-time homebuyers can ensure a problem-free step onto the property ladder by securing the help of experienced professionals. It is a good idea to shop around until you find the estate agents and mortgage advisors that you feel understand your requirements and you are comfortable working with.
Millenials looking to move onto the property ladder should also ensure that they understand the costs and challenges associated with home buying and ownership. By following the tips above, you’ll be well on your way to taking that first step onto the property ladder as a millennial.
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