Most of the people who read this column are not first time homebuyers. The fact of the matter is lots of of you that are first time homebuyers and reading this news story are relatively mature individuals who are fighting off your commitment fears of being tied to a mortgage. But there is a huge segment of the population that could buy their first home, yet it doesn't occur to them to do so. who are these people? Well, it's your 24 year old son or daughter, new to the work force, and is throwing away cash on rent somewhere. Encouraging your children to buy a home when they are young is a quantity of the soundest financial advice you can give them. Equity in a home is an easy way to grow one's portfolio with little investment. But the fact of the matter is it doesn't occur to most of us to encourage the younger generation to buy early in their lives. and trust me, it seldom occurs to our kids themselves to consider buying a home in the early twenties. they are more concerned with buying a new Halo 3 for their Xbox.
they encourage our kids to plan for their future, but they never include buying a first home sooner than average as a path to building that future. Let them know buying a home is not as difficult than they think.
When Junior starts his new job at the company and 401(K) is available, he's been informed by his folks, boss or peers to enroll and contribute at least a little something to it with every paycheck. Yet, they is seldom counseled quit renting that apartment for $750 a month and buy a $75,000 house. Where will they come up with the cash to do it? there's multiple options for first time buyers that permit for 100% financing. Get the seller to kick in closing costs (up to 6% of sales price with some products), and three can close on a loan and bring no cash to the table. If your home value appreciates 4% in the next year, that's a good return on a no cash investment.
Why do so lots of people miss the boat on this opportunity? It could be they plan to be in the area for only a short time because they will job hop to advance their career, thus viewing a mortgage as "too permanent." I counter to basically sell the house when you move. Or maybe they expect their income to double or triple over the next two years. I say buy a home now, then upgrade to a new home; sell or rent the old house. Investing in real estate is a proven, safe and solid return on investment. and with the right combination of credit history (or a history of paying utilities, cable and your cell phone on time) and no cash down, you or someone you care about can start investing in the future.
For some time, I've considered writing this series for first time buyers to let them know buying a home is not as difficult than they think. But, the more I thought about it, the more I realized the advice I would offer would most likely not reach my target audience. So parents, it's up to you to supply your kids with this last little bit of advice and help to set them free to further establish their independence in this world. Clip this news story out and tape it to their iPOD or the steering wheel of their automobile - someplace it will get noticed.
I think for most of us who've been through the experience, our first home buy was a daunting experience. there's so lots of choices and unknowns - it can be overwhelming. In this series, I will try to break it down the system into small logical steps and make it not as difficult understand the steps involved in financing your first home. Where do you start? that is perhaps the easiest part. Our newly established worker should first make a list of all his or her debt obligations such as student loans (unless deferred), automobile payments, credit card debt, etc. Hopefully at this age, this will be a small list. Then add what you think amount you could afford for a mortgage. Take that amount and divide it by your gross monthly income. If you come in at 43% or less, you're in business. If you have something in your savings or checking - great. If not, don't let it deter you. You have options.
0 comments:
Post a Comment