How To Buy A House In Your 20’s
Owning your own home by the age of 25 has become a lost dream for many millenials who simply can’t afford to get started on the property ladder.
According to a survey by the BBC, just one in five 25 year olds own their own property, which has almost halved compared to two decades ago.
So is there opportunity for young people in their 20’s to purchase their own property?
The biggest hurdle comes with obtaining a deposit. Many people are able to afford the monthly payments of a mortgage however struggle when it comes to saving for a deposit to get started. With government schemes now in place to help people to start to save, there are ways of saving and ensuring that you’re putting money aside each month to start your property journey.
But there are also other factors to consider for the millennial generation when it comes to buying their first home.
Can you make the decision to be fully committed? Are you prepared to make a little sacrifice and to put money aside every month or when possible to save for a deposit? This is the way to make the dream a reality.
There’s a great deal of advice available to anyone looking to buy a property and as it’s been said many times; buying a house is probably the biggest investment you will ever make in a lifetime. Therefore it’s imperative that you’re committed to the cause and are ready to make that commitment.
Millenials are known for living a nomad lifestyle and sticking to one location is not a choice many want to make which is why it can be a harder decision to make when seeing peers going off to travel the world or moving around on a regular basis. However those who have a desire to settle down and commit to a long term goal have an advantage which should be encouraged.
With the decision to commit, comes the matter of finance. When it comes to finding a mortgage, a lender will look at every aspect of your finances. If you are looking at purchasing with a partner, both finances will be taken into consideration. They will look into every area of spending from rent payments to food shopping bills, to pet bills and weekly entertainment costs.
To ensure that you’re ready for what’s to come, work out all your incomings and outgoings down to the smallest detail so that you can be completely honest with with how much you can afford. You’re only cheating yourself if you miss out details now that later on may mean that you’re unable to afford as much as you have borrowed.
When you delve into your finances, don’t forget about the credit card repayments and any other debts that you may have. If you’re later on in your 20’s, you may have had some kind of credit at some point, whether that be a store card or bank credit card / loan – the mortgage company will check this by accessing your credit score.
When you’re buying a home, you’ll need to consider the extras that come with purchasing a property, not only a deposit but the solicitor fees and surveys that may need to be taken.
Find a lender
Once you are prepared, you’ll need to find a lender that is prepared to loan you a mortgage. This is the biggest step and hurdle that you will come across and as a millenial, a big achievement.
Do your research on the different lenders available to you. Most millenials are digitally inclined and are clued up when it comes to the internet. Google is your friend! Research and make appointments with lenders to discuss your options. Be sure to compare a few before you settle on the one you’d like to use.
Different lenders will provide different offers and some may be more lenient when it comes to your credit score. It’s also worth looking at local government schemes as first time buyers can benefit from help with their purchase. Options at the moment from the government include:
- Help to buy ISA
- Shared ownership scheme
- Equity loan
- Own your own home
- London help to buy
Government scheme finder: https://www.ownyourhome.gov.uk/scheme-finder/
Find an Estate agent you trust
We’ve put this last on the list not because it comes last on the things to think about, but because we want to make sure that you are positive you want to buy your own property. As estate agents we fully believe in supporting all our clients from beginning to end with the whole process, whether they are first time buyers or selling a family home.
Finding an estate agent that you can trust is vital to your home ownership journey and having communication and a point of contact at all times is important to both your sanity and the joy of the experience.
Professional estate agents have the resource, knowledge and experience behind them to guide you in every one of the points above, meaning that you can have expertise on hand every step of the way.
You can discuss with your estate agent your needs verses your wants, your long term goals and aspirations and they’ll not only help you find the perfect first home but walk you through exactly what you need to do to achieve it – right down to the point when the keys are handed over to you!
So the decision is now yours. If you’re a person in your 20’s in a position to think about settling down and making the biggest decision of your financial life – are you ready to own your own home and start your journey on the property ladder? If so, we’d love to help. Get in touch to book a consultation and discuss your options moving forward.