We often assumed that buying a home is the logical thing to do in our 20s. You know the process: finish college, find a job, start a family, and buy a home. Is this really still the case?
Do you have to buy a home in your 20s? Is it even worth buying a home before you hit 30? I wanted to break this article down in three questions that should help you determine if buying a home is the right decision for YOU right now.
How much money do you have saved up for your home?
How much money do you really have for a mortgage down payment? Just because you have a set amount of cash in your savings account, you shouldn’t rely on this amount for being solely for your down payment. The reality is that you need to factor in the plethora of other costs that go along with buying a home. Some of these costs include:
- Property taxes
- Agent fees
- Lawyer costs
- The expense of moving
- I could go on but I won’t for today
Don’t assume that all of your savings will go towards the down payment on your new home. There are many other costs that you need to consider when buying a home.
How do you plan on making money?
How steady is your current job? Gone are the days of working in the same place for your whole career. Our generation is going to switch jobs often.
How much longer do you see yourself working in the same company? If you plan on quitting or looking for work elsewhere, you might not want to tie up your savings in a home just yet.
Do you want to start your own business? If you want to start your own business it’s going to be tough to venture off on your own knowing that you have to spend a set amount of money on your mortgage. If you want to go off on your own, you might want to delay buying a home.
Look at your job stability and plan for making money before you tie yourself down with a home purchase.
What’s the cost difference between buying and renting?
This is usually the deciding factor for anyone that wants to buy a home. We don’t want to feel like we’re “throwing money away” by renting so we conclude that buying is the better option.
The thing is that all home ownership costs need to be considered: mortgage, property taxes, maintenance fees, moving costs, potential repair costs, and insurance. Once you have considered all of the proper costs, you make a more education decision on the largest purchase of your life.
What’s the difference between rent and ownership costs when making your decision? It’s not always the better option to buy.
After reading this article I hope that you have a clear picture of what you plan on doing next when it comes to buying a home in your 20s. I’m here to answer any questions you may have in the comments section. I answer every single question in my eBook on Deciding if You Should Rent or Buy in Your 20s.
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12 thoughts on “Do You Have to Buy a Home in Your 20s?”
Too many people assume buying is better. Although, I personally prefer it because of the long-term results. Buying a house now means that in 30 years I don’t have any costs for housing (or relatively minimal costs). This means a lot more freedom later!
I just bought a condo a few months ago (first home) and have already started saving up a down payment for my next home. I figure I can keep this one and rent it for cash flow when I upgrade somewhere down the road.
I’d like to have a house before I’m 30, however, I set the goal of 25 and didn’t meet that. Guess you could say I’m a little too picky!
I spent about seven months looking at well over a dozen homes before I picked the one that I live in now. It is good to be picky, but too picky means you will never buy.
I bought my first home when I was 27 years old. It cost $36,500, I had $10-11K and assumed their loan. My payment was less than my rent. My children did not buy their first home until they were in their thirties. Everything is completely different now.
I put down 25% on my home when I purchased it, but had I been able to find something for $36,500 I could have purchased it outright! Times have certainly changed.
To put in context, my absolute dream home (5,000 sq. ft. mansion) was $80K! Salaries were a lot lower too. It was 1973!
Wow, a home that size in my neighborhood runs from about $500k-$800k. Someday…
Mid 20’s seems like a good time, if one knows s/he wants to be there for the next 5-10 years. If 10 years, and the cash flow is fine, I always think it’s better to buy. It’s a joke how cheap my mortgage is compared to rent now for a rental property!
I am in the same boat. I could easily rent out my condo for $500 more than my all in cost including mortgage, taxes, HOA, and utilities.
It all depends on who you are. I am 25 years old, bought a house last March, and have 9% of it paid off already.
Young people just need to realize that they can’t have a 500K house in the middle of a nice neighborhood. I bought out in the country because that’s where I love to live. Rent is way more expensive than my payments.
I have often wondered how I could ever afford a house as nice as the one I grew up in, but now that I am a homeowner I see how the cash flow works and what my potential could be in the long run.
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