{"id":2975,"date":"2023-05-12T07:35:48","date_gmt":"2023-05-12T11:35:48","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=2975"},"modified":"2024-04-25T23:17:38","modified_gmt":"2024-04-26T03:17:38","slug":"at-what-age-is-it-time-to-buy-a-home","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/at-what-age-is-it-time-to-buy-a-home\/","title":{"rendered":"At What Age Is It Time to Buy a Home?"},"content":{"rendered":"\n
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It\u2019s legal to buy a house at the age of majority<\/em>. That special number is 18 years old \u2014 with a few exceptions. People reach legal adulthood at 19 in Alabama and Nebraska. And Mississippi residents are late bloomers\u2014they stop being minors at age 21.<\/p>\n\n\n\n

Legal majority means you\u2019re old enough to apply for mortgages, sign (or even co-sign) binding contracts, and close real estate deals.<\/p>\n\n\n\n

But it usually takes quite a few years after the age of majority to build the credit profile that works for a mortgage.<\/p>\n\n\n\n\n\n\n\n

The Average First-Time Buyer Is Thirty-Something and Rising<\/h2>\n\n\n\n
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Homes are getting more expensive and that means loan approvals are getting harder to reach. No wonder the average first-time buyer is getting older.<\/p>\n\n\n\n

The average age of first-time home buyers is 36, according to the National Association of REALTORS\u00ae. This is three years older than the average 2021 buyer!<\/p>\n\n\n\n

Six in ten millennials lack the money for a down payment on a home. Most do want to buy, but simply can\u2019t save enough, given student loan debt and today\u2019s expensive housing market.<\/p>\n\n\n\n

Another factor is the job market. Stable jobs that end in retirement are largely things of the past. People are changing careers, starting up companies, working in a gig economy. The tech sector is laying off workers. All of this means fewer young people ready to settle into one place and commit to a mortgage.<\/p>\n\n\n\n

More young people are renting for longer. And we now have corporations, including publicly traded companies, buying up homes so they can make money off the renters.<\/p>\n\n\n\n

\u261b<\/em> How can young buyers compete in a market where <\/strong><\/em>Wall Street real estate companies keep getting richer\u2014and getting tax breaks<\/em><\/a>?<\/em><\/strong><\/p>\n\n\n\n

Reasons to Buy at an Early Age<\/h2>\n\n\n\n

The earlier if life you become a buyer, the earlier you\u2019ll be paying off a loan. That\u2019s how to build equity \u2014 meaning the value of the home shifts from your lender to you. Meanwhile, those steady mortgage payments build your credit up, month by month.<\/p>\n\n\n\n

For those who can manage it, homeownership at a young age can be highly advantageous. Over time, an owner builds value in the home. That\u2019s value that can be borrowed against, or that turns into profit through selling.<\/p>\n\n\n\n

Along the way, you\u2019re learning how to deal with home expenses \u2014 a fine art! And you\u2019ll acquire a sense of stability and community that grows after you\u2019ve put down local roots.<\/p>\n\n\n\n

Do you have the credit profile you need, though? And do you know what boosts your score and what brings it down? Should you get a new credit card \u2014 or pay off credit card balances you\u2019ve got? Raising your credit score<\/a> is the key to a mortgage with decent rates and terms.<\/p>\n\n\n\n

And be sure you\u2019re prepared for any unexpected changes, with enough cash in reserve. You\u2019ll still need funds after <\/em>you\u2019ve parted with the down payment, closing costs and fees!             <\/p>\n\n\n\n

Reasons to Save for Later<\/h2>\n\n\n\n

Making the leap from renter to buyer means a lot more tasks to deal with on a continual basis. From handling the grounds maintenance to calling the plumber or replacing that worn-out fridge, now it\u2019s on you.<\/p>\n\n\n\n

In any case, if you\u2019re a young person, a commitment to a home makes you less flexible. Older buyers tend to be less drawn to experimentation \u2014 in careers, friends, and places they want to be. Would you feel tied down if you had to stay in place for more than five years to make this major investment worthwhile? Then it\u2019s probably best to wait a few years.  <\/p>\n\n\n\n

\u201cBut a mortgage will be cheaper than rent,\u201d you might say. In many places that\u2019s true. But here\u2019s the rub. You need a strong credit record to convince financial institutions to lend you money to buy a home. And very few people under 30 are in the position to pay for a home with cash.<\/p>\n\n\n\n

Building a good credit profile takes years. It\u2019s typically best to wait, earn, and save, until you\u2019re positioned to get a mortgage with terms you can live with. If you\u2019d have to pay close to (or more than) 30% of your monthly income on your mortgage payments, it\u2019s unlikely that a lender is going to say OK to that.<\/p>\n\n\n\n

\u261b <\/em>Ready for homeownership but short on funds? One way to afford the down payment and your monthly mortgage costs is getting a roommate, and creating your first deed as a <\/em><\/strong>tenancy in common<\/em><\/a>.<\/em><\/strong><\/p>\n\n\n\n

Three Signs It\u2019s Time to Buy Your First Home<\/h2>\n\n\n\n

You might be ready to buy your first home when\u2026<\/p>\n\n\n\n