Budget, Organize

Buying a House in Your Twenties

buying a home pin

Owning a house in your twenties may seem impossible, but I promise you that it’s possible! If you are a twenty-something and dream of owning your own house then this post is for you.

My husband and I purchased our home as 25 year olds, and we have lived here for almost 4 years. Did I mention that we were living on one income (a teacher salary at that) for a year prior to buying our home? Owning our own home was a priority for us so I want to share some tips that will get you well on your way to becoming a home owner!

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Commit to Your Goal

The first step to owning your own house is committing to a goal. If you visualize, write down, and discuss your long-term goals then you are more likely to follow through with them. Committing to your goal will require you to live by a stricter budget which takes perseverance and determination. Don’t give up until you reach your goal!

Refinance Your Student Loans

There are several types of loans that you may be struggling to pay each month. One way that you can start saving more money to put away for a down payment, closing costs, inspections, etc. is to become intentional with getting out of debt. Here are a few more reasons why you should consider refinancing your student loans:

  • consolidate all of your loans into one payment

  • lower your monthly payments

  • receive a fixed interest rate when you consolidate your loans (instead of three different rates for three different loans)

  • choose from 10 years, 25 years, income based repayment plans for Federal Consolidated Loans

  • defer your payments for up to three years because a consolidated loan is considered a “new loan”

  • no minimum or maximum amount that can be consolidated

  • if you consistently pay on your student loans then it has a positive effect on your credit score

  • loans can be automatically drafted out of your account so that you don’t have remember to pay it each month.

Sofi is a great resource to get you started with the refinancing process. You can find out what your rate is without effecting your credit score. Sofi is also great for credit card debt that you are paying more than 10% interest on.

Student loan help may not be the loan help that you need. If you are looking for help with auto loans or home loans then look into LendingTree.

Save Money

I’m sure that you knew that this tip was coming. Saving money is the most important concept that you have to commit to when pursuing purchasing a home. You will need one savings account to deposit all of your house buying funds into. If you will still be traveling and taking vacations while you are saving then I suggest opening two separate savings accounts. That will help you keep your funds organized. Put any extra cash into your home savings account: tax returns, money from yard sales, etc. For some ideas on how to make extra money check out this post!

There are plenty of ways to save money. You can start buy cooking your own meals instead of eating at restaurants. This one budget change can save BIG bucks. Another way to save money is to reevaluate your grocery budget. I posted details about how I spend $150 for two weeks of groceries and how to cut that in half to $75 for two weeks of groceries! For more details of how I save money while on a budget click over to this post.

Budget

To determine what you can afford for a monthly mortgage, you need to print out detailed statements of your checking account to see how much money is coming in and going out. It can be as simple as typing it up in a Word document or on Google Drive. I like to separate my expenses into various categories.

personal budget pic

Once you know how much money you are spending on food, restaurants, gas, cell phone, etc., then you can start estimating how much your knew expenses will be when you purchase your home. I ALWAYS over estimated services such as gas, electric, water, wifi, cable. I also calculated in a vehicle payment even if we didn’t have one at the time. The main reason for doing that is to make sure that we didn’t purchase a house that exceeded our budget.

Use Online Mortgage Calculator

Isn’t is jumping the gun to calculate a mortgage payment if you just started saving? Absolutely not! Using an online mortgage calculator allows you to calculate how much your mortgage would be when you put in the asking price, down payment, insurance, etc. It is so helpful so that you have a goal for the amount of money that you are saving.

mortgage calculator

Comfortable Mortgage Payment

When we purchased our house we knew that we still wanted to be able to take nice vacations so we wanted to keep our mortgage under $1,000 per month. That was one of our goals that we committed to in the beginning. By using the online mortgage calculator we were able to determine the price of a house that we could comfortable afford.

To make sure that you are on the right track, I suggest visiting your bank and speaking to a loan officer. Tell them that you are in the planning stages of saving for a house so you want to know the amount that the bank would loan you.  This will also be a step that you have to take later down the road to receive a pre-approval letter from your bank. The letter states how much the bank will loan you. Some real estate agents won’t take you to view certain houses without a pre-approval letter.

Hidden Fees to Save For

There are always hidden costs when buying a house. If you know them upfront then you will be prepared and can save for them!

  • Appraisal

  • Home Inspection

  • Home Warranty

  • Land Survey Fees

  • Mortgage Life Insurance

  • Mortgage Loan Insurance

  • Mortgage Application Fees

  • Realtor Fees

  • Renovations

  • Sales Tax

Lists, Lists, and More Lists

While you are bulking up your savings account to save for a down payment and other home expenses, start making lists of your “wants” and “needs” in a house. Don’t get discouraged if you change your mind from day to day. Buying a home is a HUGE step into adulthood so don’t take it lightly. My husband and I each made a list of what we had to have in  a house and what we would like to have. We compared our lists and compromised.

Anytime we viewed a home we would take our lists with us and made pros and cons lists for each house. It helped us weed out the houses that were a definite NO and the ones that were a MAYBE. 🙂

Enjoy the Ride

owning a house
Our new neighbor saw us taking our “first time home owners” pictures and gave us a few props. 🙂

Saving for and buying a house is such a fun time of adult life. I loved using realtor.com to search for houses in the areas that were desirable to us. Looking at the pictures of each home and doing quick drive-bys after work made it so much fun!

When you do find your perfect home, don’t forget to hire a photographer (or ask a friend) to snap some pictures of you in your new home BEFORE you move in. I still love looking at our first time home owners photos. 🙂

If you create goals and stick to them then you will own your own house in no time! Do you have any more tips for new home buyers? Let me know in the comments below!

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