August 3, 2020
5 MINUTE READ
As your life changes, so will what you need from your home. And while life has a way of consistently throwing curveballs that no one can predict, you can still be prepared no matter what stage of life you’re in.
To find out what you should do differently when it comes to real estate and your mortgage in your twenties, thirties, and forties, we went straight to the experts. These tips can help guide you to make smart and informed decisions, whether you’re a first time home buyer or ready to upgrade to something new.
Experts recommend paying yourself first, then paying your bills, and then using what you have leftover for fun. If you don’t have much leftover, then cut your monthly expenses or find a way to earn additional money. Plan to save $5,000 to $10,000 to use for a down payment, and then plan to start home shopping. Find a real estate agent who is experienced in working with young buyers who can help turn your dreams of owning a home into a reality.
As a first time home buyer, it’s important to get pre-approved early in the home buying process so that you know what types of mortgage loans are available to you. Most often, it makes sense for young buyers to consider a few different loan options, while taking into account the length of time you plan to own the home. Fixed-rate mortgages are overwhelmingly the more popular choice, but if you plan on being in the home for 10 years or less, an adjustable-rate mortgage may actually make more sense for you.
The mortgage you qualify for, as well as the loan terms you are offered, will greatly depend on your creditworthiness. Months ahead of when you plan to buy a home, you should begin checking your credit report (free from each of the major credit bureaus once a year). Closely inspect your credit report for any errors and make sure to correct any misinformation. And if your credit score isn’t where you’d like it to be, work to improve it. Pay down any outstanding debt and make sure to always make your payments on time each month.
Upgrading to a bigger home is often a priority listed by many 30something home buyers. But it’s important to not think only about scoring more space. Instead, really think about your lifestyle and what makes sense for you and your family. Take various factors into consideration, such as school district, your quality of life, access to major transportation systems, the walkability of the neighborhood, and more. And keep in mind you should always use caution when buying a bigger home — just because you can afford more home right now doesn’t necessarily make it the right decision for your budget in the long run.
If you choose to purchase a home in need of major upgrades, be sure that you don’t over-improve the home to the point of pricing it out of the neighborhood. When it comes time to sell, buyers may appreciate the high-end finishes and custom fixtures you chose, but they won’t pay more for them than the area demands.
By the time home buyers hit their 40s, they can be in a wide variety of life stages. For instance, some buyers in their 40s have a preschooler at home and are looking for the best school districts, while others have older children who are getting ready to head off to college. Both of these buyers, even though they’re the same age, have very different goals and expectations for buying a home. In your 40s, your real estate decisions should reflect your current life and needs.
While this likely won’t resonate with you or apply to you if you still have young children in the home, many 40somethings are actually closer to the empty nest phase of life than you’d think. Many people this age are focusing on the quality of life, and enjoy traveling and going out. As such, they also don’t want to be consumed with large maintenance projects in the home or the yard. Plus, when you downsize, your monthly mortgage payment will likely be lower, freeing up budget for other lifestyle upgrades.
If you can afford to buy a second home in a resort area, not only can you use it as a vacation home for yourself, you can also rent it out to generate additional income. There are a number of different platforms you can use to rent out the property yourself, making it easier than ever to do.
Whether you’re just getting started or you’ve been through the home buying ringer, Reali’s got your back. Reali agents are experienced local agents who work with your best interest in mind at every step of the transaction. All of our agents are experts in the areas they serve. They’ll support you through the entire process, from search to negotiations, throughout the paperwork process and close.