5 Tips for Buying a House at a Young Age – It isn’t Easy but It Can be Done

buying a home at a young ageMy husband and I were 23 when we bought our first (and current) house. Our real estate agent said she normally doesn’t work with first time home buyers this young. We knew what we wanted and were ready to make a commitment when it came to buying a house. It seems like people are waiting longer and longer to get married, purchase a home and start families. Not everyone has the same priorities and maybe you are young and want to buy a house. Buying a house at a young age isn’t easy but it can be done. Here are a few tips for buying a home at a young age.

1. Educate Yourself

First and foremost you need to understand how the home buying process works. Do you understand how a mortgage works? Do you know what private mortgage insurance is? How is your financial situation? Do you have a good credit score? You need to understand the basics of home buying before you start house hunting. Why? It’s simple: So you don’t mess up! You need to understand exactly what you are signing up for when you buy a house. Buying a home is a huge commitment. As a young adult, you need to understand how the process works.

2. Set your priorities

Buying a house can be a little overwhelming especially if you are young and on a tight budget. We learned that house hunting is all about priorities. As a young homebuyer who is likely on a tight budget it’s safe to say that you probably be making a few concessions. You will need to ask yourself: What do you really, really want your house to have? You may not know the answer to this question right away. We had to look at a handful of houses before we knew our answer.

For us the answer was location. Location was a key factor in our house hunt. It wasn’t until we looked at a few houses outside our preferred city that we realized how important location was to us. Living in this particular city however did mean higher home prices. Higher home prices meant we couldn’t afford as nice of a house had we moved to a different city. We were okay with this and decided to adjust our expectations so we could live in the desired location. This meant smaller houses and/or houses that needed more renovations.

3. Think long-term when buying a house

If you are young and buying your first house, spend some time thinking about your future. Make sure that you can live comfortably at your first house for a few years. Our mortgage counselor told us that people typically live in their houses an average of 5-7 years before moving. Do you have a stable job or will your job require you to relocate? Do you know where you want to live for the next few years? Is there a chance you will need to move? Do you want to start a family soon? Will there be enough space in the house? Is the house in a good school district? These are all important questions to ask yourself when you are thinking about buying your first house at a young age.

The reason you want to be able to stay put for a few years is that selling a house and moving is not cheap. It’s important that you’ll be comfortable in your first house for a few years and won’t want to move right away.

4. First home not the dream home

If you want to buy a house while you are young, let’s be honest, you probably won’t be purchasing your “dream” home. It won’t be a perfect house. There will likely be parts of the house that need updating or fixing up. It’s okay. Nobody said that you should be buying your dream home at a young age. Just be excited that you are house hunting and be ready to make some compromises. You have your whole life ahead of you to get the dream house! I know I would love some marble countertops myself, but the laminate will just have to do for now!

We have several rooms in our house that we would like to update including the kitchen and two bathrooms. However, this type of work is very expensive and we probably won’t get to it for a few years. That’s okay. The house is safe and functional and this is what is really important. As a first time homebuyer, you have to be ready to make these compromises.

5. Build an emergency fund

If there’s one thing I’ve learned since my husband and I bought our first house nearly two years ago, it’s that houses require maintenance. Maintenance isn’t cheap. As a young, first-time house hunter, make sure you have a good emergency fund established when you buy your first home. Things break and need repairs. In our first year, we had to buff and coat our wood floors (the floors were in really bad shape by the time we moved in) and we replaced the washer and dryer. Not cheap! This was in addition to buying things we needed as new homeowners like a lawnmower and all sorts of other things that add up quickly! The point is, make sure you have cash set aside for house emergencies. They will happen and you will need to spend money maintaining your home. The sooner you can start that emergency fund, the better!

What do you wish you would have done differently when you purchased your first home? What is your advice for young, first-time home owners?

Photo Credit: Freedigitalphotos.net

Comments

  1. I agree about thinking long term if you are buying a home young, especially if you think you may want to have children. It may not be something you are contemplating when you buy the home; however, you want to know that when you are ready for that step, that your home will not only support children physically but environmentally (like a good school district). You would not want to have to sell your home to accomplish this and potentially take a loss. I also agree that you need a healthy emergency fund if you are going to be a homeowner. It is amazing what sort of “surprises” can pop up in your home that you were not expecting.
    Shannon @ Financially Blonde recently posted…Music Mondays – Beer MoneyMy Profile

  2. My suggestion for any two-income couple is to wait to take out a mortgage until you’ve got enough down payment saved to make the mortgage affordable if one of the earners loses his or her job. Then get a 30-year mortgage, but make payments as if it’s a 15-year mortgage. If times get tough, your insurance (paid for through a slightly higher rate on the 30 vs. 15-year mortgage) is the freedom to fall back on the 30-year payment if you need to.
    Kurt @ Money Counselor recently posted…Wacky Video and Thanks, 21 Apr 2014 UpdateMy Profile

  3. Our first home is now one of our rentals and I don’t really have any regrets other than wishing that we had a bigger down payment!
    Holly@ClubThrifty recently posted…Disaster Averted: 4 Reasons I Love VRBO.comMy Profile

  4. I would have saved up more of a down payment. CMHC insurance cost actually absorbed most of my 5% down!

    Second thing would have been to double my payments early on.

    Mortgage would have been paid off MUCH sooner.

    Third; Variable open mortgage instead of a fixed closed mortgage

  5. Awesome post! Being a fellow “young” first-time home buyer, I would echo many of the things you said. Having priorities and realizing your first home won’t be your dream home are absolutely essential. Our home has small closets and a small kitchen. It also has and will require a lot of work to update over time. With that being said, we are in the exact location we were looking for. We could have bought a house an hour from downtown and hit more of the things on our wish list, but the location would not have been ideal for where we are at in life. Our next home we will hit more of the things on our wish list, including a ‘true’ master bedroom and bigger kitchen. I think we’ll enjoy the next few years in our home but we’ll have to live with our trade-offs for the time being.
    DC @ Young Adult Money recently posted…How I Plan on Fast-Tracking Financial IndependenceMy Profile

  6. I would say vet the neighborhood. When we bought our first home, we liked the house, but have fallen deeply out of love with the neighborhood. We are moving now after 7 years of regretting it. I would also advise that you save up for a down payment. That is really important and gives you immediate equity.
    Grayson @ Sprout Wealth recently posted…You Can Make Money Quick! Here Are Some WaysMy Profile

  7. I think a healthy emergency and then some is a must for a home purchase. I wish I had saved more when we purchased our first home because I was shocked at how many repairs we had to make in the first year despite a good home inspection. You just never know what problems may be lurking when you buy your home.
    Shannon @ Financially Blonde recently posted…Music Mondays – Beer MoneyMy Profile

  8. Great post, Liz!! 🙂 While home-ownership isn’t something that my husband and I are thinking about in the short-term, it is something that we’re open to – if it makes sense for us to buy vs rent. Right now, the cost of living and home purchase values in Los Angeles are keeping us at bay. It helps to get a good list like this going for when we are ready to pull the trigger. I very much agree – having the safety net of a good emergency fund is a must. Thanks for the food for thought!
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  9. I don’t have any regrets over our first home purchase. We paid a good deal down and were fortunate to hit a real estate climate where houses were escalating in price. So when we sold our house it had appreciated quite a bit. We didn’t have an emergency fund at that time which was probably a mistake. We didn’t end up needing it because it was a new house (so few repairs) and we cash flowed everything else. With our second home though that we’ve lived at much longer, I’ve realized the value of an emergency fund way too many times! 🙂
    Brian @ Luke1428 recently posted…10 Clues That Reveal It’s Time to Change Your JobMy Profile

  10. Super smart tips here, Liz. We bought a cheap starter home when we were in our twenties, and how I wish we would’ve saved more money then, instead of blowing all of the leftover stuff. Would’ve changed stuff completely for us now.
    Laurie @thefrugalfarmer recently posted…Extreme Things We’ve Done to Save Money While Getting out of DebtMy Profile

  11. We were in the mid 20’s when we bought our first house. It wasn’t that easy, but setting the right priorities and being consistent in what you’re doing is just one of the keys to be able to purchase your first house. Having a strong emergency fund is very important too.
    Marie @ Financial Debauchery recently posted…You Don’t Need to Be Genius to Understand the Annuity FormulaMy Profile

  12. Long-term thinking and investing for down the road are both great messages that apply to far more than buying your first house.
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