Should you buy a house before you turn 30? This question means a lot to different people. Millennials can find this question daunting, exciting and pressurizing all at the same time. House is a big deal also probably the biggest investment of your life.
Buying a house can tie you down to a place you will be calling your home for the most part of your life or until you sell the house and look for another one. So what is it making buying a house a big deal?
Buying a house isn’t the same as buying you a car or a bag of groceries. It requires a lot of finance, a stable job, research and time. Unless you don’t tick all these boxes it is not advisable to down the route of hunting the house.
So, if you think you are ready, we have some 15+ boxes to get ticked in order to make your dream of buying a house easy, hassle-free and smooth.
Also, this is in no means saying that you aren’t ready (if not all points get checked mark, you do YOU) to buy a house.
Following are some 21 important tips to one year plan to buy a house consider before getting into buying a house before you turn 30.
1.Set up an automated bank transfer
Sure, you have a bank account and it is one with the prestigious bank, then take advantage of it. There are two kinds of people who know everything about banking and then there is a certain group of people who don’t understand a word.
But if you have a dream of buying the house, knowing bank benefits is a must. Set up an automated bank transfer from your savings to your checking account. This will ensure that every time a paycheck enters your bank account, there is always an amount (even though it is small) transferred to the checking account.
The transferred amount will earn you a higher rate of interest (double win). This transferred amount can be a huge benefit for your down payment as well as it can act as an emergency fund too.
2. Stop impulse buys
Nothing in life comes easy. Those impulse shoes buy, last minute vacation flights can cost you a bomb.
Impulse buys to give you an immense pleasure of satisfying the craving you have but it can burn a hole in your pocket. To make sure you stick to plan, have a plan and a budget to work around.
Cut down unnecessary subscriptions of TV, magazines, etc. which you are not able to take advantage of. This doesn’t mean you live your life in the miserable state. You have to make smart choices of where you spent your money and where you could save.
3.Narrow down where to live
Everyone has a favorite city to live in but not everyone can live there. It could be either not practical, or expensive or your workplace is far away, etc. to narrow down a city where to live is a very crucial step in buying your house.
Factors such as what kind of neighborhood you what, commute time, amenities, facilities, etc. should be considered. Whatever suits your need, write it down with its pros and cons and then decide if you could afford it.
4. Research, investigate and agent
From the day you think you are ready to buy a house and decided where to buy the house the next big step is research.
Yes, there are agents to do that but remember they will show you the house they want to sell, not what you want to buy. Also, a little research from your end won’t hurt. Consider what kind of house you want to buy, keeping in mind your budget.
If you are single when you are buying a house, it will be ridiculous to buy something outrageous as 4BHK with garage. Research about the real estate market, which area is booming or if the property rates are good enough to buy, etc.
Having an agent is always a good idea but research and investigation from your end show that you have your homework done right.
5.No debt rule
This rule applies to all your cards, and personal loans if you have any. It is just not advisable to undergo a loan for your new home when you are under debt.
Buying a house means bi-weekly or monthly an installment will go to the bank. But if you have a previous loan to clear how it is feasible to pay off the home loan. Plus with an existing loan, your home loan will have a higher rate of interest.
6. No borrowing
If you want to call it your home, it has to be your own hard earn money. Money from family and friends isn’t your money. Be ready in every sense to own a home, especially on the financial front.
7. Don’t buy in order to sell
Real estate market may be booming or might boom in upcoming years but this shouldn’t be the focal point on buying the house.
Never buy or invest in real estate for your current income source. Buying a house only to renovate and sell further will cost you money and time which can be exhausting.
8. Put down what you have
If and when you finalize your house, the first thing is to consider the home loan payments. It is standard practice to put down 10-20% of the home price as down payment.
But if you have more than putting it down as your down payment. This will not only reduce the time frame of repayment but can also reduce the rate of interest too.
9. How long do you see yourself living there?
Very important question. Buying a home can be an investment for a lifetime so if you buy a home, you have to live in it, with it. If you aren’t able to use to its maximum benefit, it will cost you more as it takes a lot to maintain a house.
10. Buy only if you want to settle down
Your 20s are some struggle-filled period. It can be on a personal front or professional. Life is full of ups and downs of its own and having a house of your own can be an added responsibility.
It takes a lot to maintain a house but this doesn’t mean you should push yourself to settle in a way that you don’t want. Marriage and buying a house doesn’t go hand in hand. It is completely your decision if you think you are ready to buy your house on your own.
11. Buy the house you need, not want
There will be a time when every house you see looks amazing, great but out of the budget. It is very important to work around your set budget.
Pinterest and home décor magazines show some amazing great homes but they are present in a way that it should please you.
Remember your needs and wants are different. Narrow down what you can afford and work accordingly.
12. Don’t take inspiration from TV or magazines
Continuing from the above point, shows, and magazines which illustrate examples of house décor and Instagram-worthy ideas may look good in pictures but remember the practicality of your situation.
13. Live by yourself in order buy a house
If you are single or even in a relationship living by yourself is very important. This gives a great sense of responsibility for every little thing you need to do in and around your home.
Be it grocery, paying bills, or cleaning the house there is a lot of work and when you live by yourself these all chores will be done by you. If you are ready to do all these by yourself, then consider buying a house.
14. Ask your partner
If you are in a relationship or married, it is utmost important to ask, share and take advice from your partner. Consider their needs and wishes when you are buying a home. Knowing preferences and likings are very important.
15. Consider commute cost
It is very common to buy a house outside the city in order to save money on the house but imagine the time and energy it will take to commute 2 hours to and fro your work and house.
You need to consider the time and money it will cost in the long run maybe you can invest an amount in the house and buy a house in the city itself.
16. Consider extra expenses
Now buying a property comes with hell lot of extra expenses. Property tax, society maintenance, electricity bills, gas bills, etc. are some of the extra expenses which can add up at the end of the month or yearly.
Always consider before putting down the money if you will be able to enjoy the amenities you are paying for.
17.Buying a house when self-employed is a nightmare
Self-employment seems very liberating yet it doesn’t sound like a stable income unless you are running a business empire.
Self- employment which doesn’t earn a stable income is not when you should think of buying a house or when you are starting out a start-up business wait till you settle in your work and then take the plunge.
18. Don’t buy only to redevelop
When you will be looking for a house, there will be a cheap house in the matter of money and there will be reasons attached to it. Always make sure you check with the agent and the previous homeowners, ask them questions to understand why they are selling the house at a slashed price.
19. It takes a lot to maintain a house
Buying the house means doing everything on your own. Sure you can call for help once in a while but mostly it will be you who will be taking care of the house. The house will not clean itself you will have take out time in order to maintain the house.
20. Keep an emergency fund
Everyone should have an emergency fund, you never know when you might need one. It is a good practice to set aside an amount to use in an emergency situation.
Under a situation where you exhaust your money in a situation of no job or till you get your next job or if you move city or no matter what reason you have always have an emergency fund.
21.Have a plan and stick to it
Finally, plan, execute and stick to it, no matter what. There will be many who might say you are crazy to buy a house in your 20s and some might be overwhelmed with the idea. But if you have set your goals correct and are ready to make a few changes in your life, buying a house before 30 won’t sound daunting.
This is the budget plan to buy a house. Follow these golden rules and decide when to and where to buy a house.