If you want to buy a house in your 20s, or even early 30s, there are many things you need to do. For the starter, you should figure out how much mortgage you can afford. You also need to set up some savings and investment plans so that your house becomes a reality without much stress. The following tips will help you buy a dream house at a young age:
1. Build Your Credit
Your credit score plays a big role in whether or not you’ll be approved for financing when you buy a home. In fact, many lenders won’t approve mortgage applications from buyers whose credit scores are below 650. So if you want to buy a house in your 20s, it’s important to start working on building up your credit score early.
To build up your credit score before you apply for a mortgage, make sure that all of your bills are paid on time. Make an effort to pay down any debts that you have as quickly as possible — especially high-interest debt like credit cards. If you keep those balances low, it will help boost your score and make it easier for you to get approved for financing when it’s time to buy a home.
2. Get pre-approved for a mortgage
Lenders can give you an idea of how much you can borrow before you start shopping for a home. Getting pre-approved is just as important as getting pre-qualified, which is something any lender can do at any time based on your basic financial information. With a pre-approval, the lender will actually check your credit and verify your income before giving you a loan commitment. That way, when you do find a house and make an offer, you’ll have proof that you can back up that offer with cash.
3. Pick a starter home
Buying a starter home can be a great way to get into home-ownership at a young age. Starter homes are usually smaller and less expensive than other houses. Because they don’t have many amenities, they’re often more affordable. In order to get the most out of your starter home, you should plan to move up in the next five years or so. This will give you time to build equity in your first home and afford something more expensive later on.
4. Save for the down payment
Most young adults can’t afford to buy a house without financing, but that doesn’t mean you shouldn’t try to save as much money for a down payment as possible. Larger down payment will help you secure more favorable loan terms, so it pays to save as much as you can before applying for a mortgage. You can always use savings from your down payment fund to pay closing costs or other related expenses if you happen to have extra cash on hand.
5. Find a real estate agent
Once you start looking at homes, make sure they are within your budget and also reach out to different real estate agents who might be able to help. Building a relationship with an experienced agent is important because they will be able to guide you through the process of buying a house in Canada. So, do your research to find the best real estate agency. Do more than just a casual Google search of “top rated real estate agents near me“. Refer to different sources and consider various factors to truly zero on a reliable expert.
Buying a house in your 20s or early 30s isn’t easy. But it’s not impossible either. If you have the right set of plans and you know how to execute on those plans, you can buy your dream house at a young age. The above-mentioned tips will help you get started on the right track. All the best!