Your parents will always think of you as their little boy or girl. They want to hold you back from growing up – they weren’t quite ready for those first steps, sending you off to kindergarten, and then (what feels like overnight) off to college. Time seems to fly by so quickly. Yet, here you are, ready to make one of life’s biggest investments, your biggest decision — buying your own home. Whether you’re 2 months or 2 years from this milestone, here are 5 “adulting” tips get you going.
Tip 1: Review Your Recurring Bills and Expenses. A lump of upfront cash will be needed for a down payment. Think for a moment about your rainy-day fund. How much do you have stowed away? Each time you get your paycheck, review your bills and how much of your income is left over after expenses, if any. To increase this savings, check for ways to reduce bills, starting with utilities or services you aren’t using like overlapping streaming services, or a free trial that ran out and started to charge each month. You can often contact utility companies to negotiate a reduction in utilities, or even switch to a new one to take advantage of a special, without a big impact or disruption to you. It’s often quicker to increase savings by reducing expenses than increasing income.
Tip 2: Reduce your Debt. I know, easier said than done. But did you know lenders care more about your income in relation to your debt and not just your income alone? While you’re saving cash to your rainy-day fund, decide to routinely pay down your debt, whether it be credit cards, student loans, or a car loan. This will directly impact how much a bank will lend you.
Tip 3: Create a “Mock” Budget – and live within it. Take this small piece of advice and try to budget your current life like you have a mortgage payment and household expenses already. See how you can make this work, and notice what changes you have to make in your life to make ends meet. Try to live and save on what is left over. Sure, it will be tight until you get used to it. The reward at the end is knowing what you can afford, what you’re willing to give up, and probably having a larger nest egg and less debt at the end. Think of it as a win-win.
Tip 4: Consult with a Mortgage Banker or Lender. Don’t miss out exploring all your financing options. As a first-time buyer, there are many lenders with special rates, products and options you may not know about. Get educated so you don’t miss out on the opportunities they have to offer. Consider a mortgage banker as your guide and advisor to help you make this big financial decision. Find one you connect with and build a strong relationship.
Tip 5: Hire a Real Estate Agent. Once you know what you are comfortable spending and you have made of list of your home “must haves,” it’s time to sit with a Real Estate Agent. Why do you need an agent? The listing agent for a property you may fall in love with works in the best interest of the seller, and you benefit from hiring your own agent to work in your best interest. A good Real Estate Agent will listen to your wants and needs carefully. They will make recommendations and explain the market to help you find a home that both suits your needs and is one you can afford. Your Real Estate Agent should work to negotiate terms that you are happy with, and will guide you through the necessary paperwork and the process to bring forth a successful close and home purchase.
As a parent, while it may feel like your parents never think you’re ready, know they are likely excited for you and want what’s best for you. Taking these key steps will demonstrate for yourself how ready you are, and will likely impress them in the process.
Real Estate Salesperson
Rockville Centre Office
36 S. Park Ave.
Rockville Centre, NY