Are you looking to purchase a home for the first time? This can be both an exciting time in your life and a stressful time as you navigate the making a responsible purchase. Whenever you plan to make a large investment during your lifetime, it should be given plenty of thought and consideration. You should never rush into a major life decision whether you?re purchasing a new car, buying a home, or switching career paths. This is especially true if it is the first time you are doing one of these things.
Interested in learning more about some necessary things to consider before purchasing your first home? If you?re a first time home buyer, there are plenty of things to pay attention to from finding the right mortgage broker to deciding on your mortgage plan to ensure you are financially secure.
Things to Consider When Purchasing Your First Home
Millennials are beginning to work their way into the housing market. Rather than spending time renting out homes, apartments, condos, or dealing with other rented living situations, many are opting to make an investment in their future by purchasing a home. For some millennials, they even plan ahead for this decision. Rather than rushing into it immediately after college or the minute they secure a job, they plan to give it some though. For instance, around 31% of millennials take up to two years to look into the process of buying a home before actually making the purchase.
With homes costing so much money, giving the purchase some thought beforehand is definitely a necessary step. In 2016, the average home in the United States cost around $186,000. For many people, that is not a small investment but rather a financial decision that requires plenty of planning and consideration in order to make it work.
For the 32% of home buyers who are first time home buyers, it becomes even more important to give such a costly purchase a lot of attention and thought. Rushing into the purchase of a new home without fully understanding what you are getting yourself into can be detrimental to your financial future. You do not want to be part of the statistic that states 59% of people who have purchased a home wish they understood something like their mortgage more clearly before agreeing to it.
Financing Your Home and Using a Mortgage Broker
Before you even start looking for a home, it may be a good idea to do some research about the process of financing your home and relying on a mortgage broker to assist with the entire process. You may feel as though this can wait until you have found the perfect home. However, with your excitement to buy the home and move in as soon as possible, you may end up making some rushed decisions in regards to financing. So, taking some time before you are emotionally invested in a home to consider mortgage planning could be worth it in the long run.
There are a variety of options to choose from when considering your financing plan. For instance you can finance a home entirely with a mortgage. You can also used a fixed rate mortgage, or you can opt to using something like an FHA loan when buying a home. 92% of those who purchased a home in 2016 opted to use a fixed rate mortgage, according to the 2017 NAR Home Buyer and Seller Generational Trends. The same trends report showed that 24% of buyers used FHA mortgage loans. Only 14% of buyers chose to finance the purchase of their home entirely with a mortgage.
As you weigh all your options and attempt to decide what the best choice is for you and your financial stability, it is advised that you consult with a mortgage broker. That way you can receive all the information and advice needed to make the most informed decision concerning your future.
What are you considering when it comes to financing and mortgages for your future home? Have you consulted a mortgage broker yet? Let us know in the comments your thoughts on purchasing a new home as a millennial.