2506 Sharron Drive, Chattanooga
MLS® # 1390392
Your twenties is the time when you’re still trying to figure it all out. You may or may not have found your dream job or even decided what that is. Even though some things may be up in the air, that doesn’t mean you can’t start investing in your future now!
One mistake that a lot of twenty-somethings make is thinking that they can’t afford to buy a home. Surprise—oftentimes rent is more expensive than a mortgage payment!! Rather that throwing money away on rent, here are some tips to help you buy a home now!
Many twenty-somethings have low credit or no credit at all. If you have no credit, try opening up a credit card with a small limit and paying it off every month. If you already have credit, make sure to make your payments on time and don’t have a large amount owed on your credit card.
Oh student loans. For most of us, they were a necessary evil that we now have to deal with in our twenties. Don’t worry—you can totally pay them off! We’ll show you how. Start with the smallest student loan and funnel money into that. Pay the minimums on your other loans and every extra dollar you get, work to pay off that small loan. The better your debt-to-income ratio, the better your odds for getting a mortgage, so just slowly chip away those loans. and you’ll be on your way to your own home.
Talk to a mortgage lender about how much home you can afford. There are several programs out there to help first time home buyers finance their purchase! According to Christina Lane with Movement Mortgage, the Tennessee Housing Development Agency offers down payment assistance for Tennessee home buyers, and the Georgia Dream Homeownership offers aid to first time homebuyers in Georgia. Once you know what you can afford and are pre-approved for a mortgage, you can start considering what kind of home you want!
Be sure to ask yourself how long you plan to be in this home once you’ve bought it. A home is an investment in your future, and if you buy in the right area, you can earn money years down the road when you’re ready to sell. But if you jump ship too quickly, you may not make a profit. Try to find a home you’d be happy to stay in for at least five years, which gives you time to build up equity and for your home to increase in value.
Now that you know how much you can afford as far as a mortgage, it’s time to start coming up with your downpayment! If you don’t already have a stash of money laying around for this purpose, you’ll have to start cutting back on spending and maybe even picking up some side gigs to get what you need. The goal is to have 20% down, but in reality, a lot of home buyers only have 3-5% for a downpayment. In that case, you’ll likely be paying a monthly PMI (private mortgage insurance) payment to make up for the lack of a downpayment, which can really add up! So go for gold to have that 20% ready by creating a budget for yourself and cutting out some unnecessary expenses.
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This site was last updated on April 19th, 2024 at 10:43pm