Owning a home when you are 25 years old? Probably sounds like an impossibility since you are just leaving a 4-year college at 21 and have a mountain of student debt, right? All while you are looking for a better-paying job where you can put your new degree to good use. Yet there are people across the country who are purchasing a house early on in their adult lives. It takes hard work and perseverance, yet you can do it if you start saving early and have a plan of action in place. Here are several tips you can use to make your home ownership dreams come true.
Look into an IRA and 401K
It sounds strange to be thinking about retirement planning before getting a high school diploma. Yet many young adults are working part-time jobs at this age and have fewer debts that they have to worry about. So it is an ideal time for an 18-year-old to open an IRA and put away some money. Once they graduate and start a job, they can also begin placing money into a 401k that will give them even more financial stability in the future while they learn the importance of saving early and saving often.
Make Reasonable Sacrifices
You don’t really need to purchase the newest car, pay for the most expensive apartment, or eat the pricey takeout food every single day. There are expenses in your life that can be eliminated or lessened by the money choices we make. Getting an older car, taking public transportation, renting a smaller apartment, and limiting take-out food purchases can help you save more money that can be placed toward a future home purchase. Even simply saving $50 a month can allow you to have an extra $600 a year. Multiply this by 8 years, and you can effectively save up to $4,800 that can be placed toward the down payment of the house.
Buy a Home Within Your Means
One of the biggest problems is that people buy homes that they can’t financially afford. They want the most extravagant house they can get early in age as they believe it is the only house they will ever buy. Yet you have to understand how your salary, debts and home ownership costs can dictate the type of property that you can afford to purchase. Sometimes this means you have to cut back on your expectations and look for lower priced homes with less amenities, even fixer-uppers, to get the right house that fits within your means.
You can own a home as a young adult. By planning early, you can decide on the right path that leads to home ownership based on your particular financial circumstances. Give us a call, any one of our Duke Warner Realty brokers would be happy to walk you through the process of getting started.