4 Mistakes Millennials Need to Avoid When Buying Their First Home

Posted on: 11 July 2017

There are many millennials out there who have finally landed that dream job and are experiencing enough financial stability to purchase a home for the first time. It's important that millennials buying their first home understand the full importance of the purchase and avoid common mistakes that could negatively impact their financial futures.

The following are four mistakes you need to avoid if you're a millennial who will soon be a first-time homebuyer:

Not taking enough time to build up your credit first

The length of your credit history is going to be important in determining what mortgage loan rates are available to you. Make sure you're aware of how the rates you're being offered measure up to the best rates available at the time you're looking to buy a home.

If lenders are offering you subprime rates, you may want to think twice about buying a home right away and take some time to build up your credit history first. 

Purchasing an excessively expensive home

If your credit score is good and your income is high, you may find that banks are offering you a surprisingly high mortgage loan amount. However, it's a good idea to be cautious about your first home purchase and avoid purchasing an excessively expensive home.

Frugality always pays off in the long run. Don't get carried away with your first home purchase and set a budget that will ensure that your mortgage payments will be easy to keep up with regardless of what path your career takes into the future.

Purchasing a home in an area when you may soon relocate

If it's possible that you may need to relocate for work, it's probably best to hold off on a new home purchase. You may assume that you can simply sell the home if you have to relocate, but this can be complicated.

It's not always easy to sell a recently purchased property, and you may end up selling at a loss if you're desperate to find a buyer before you need to relocate. Make sure you don't purchase a home unless you're absolutely certain you won't have to relocate anywhere for work in the near future.

Trying to do everything independently

As a millennial, you've grown up with the Internet available to you. You therefore may have a tendency to rely on yourself for tracking down information on the web rather than seeking the opinion of an experienced professional.

While doing your own research online is not a bad idea, you should also take advice from your real estate agent and any other people who have experience buying and selling homes.