Buyer’s Happiness: Making Your Best Home Buying Decision


Millennials are taking over the housing market. Reports show that people aged 19-37 have the largest share of new mortgage loans in the U.S., larger than the previous generations. Starter homes and affordable options also hallmark housing decisions made by millennials.

Whether you’re looking for homes in Montana or Utah, you’ll need to know a few basics when you do the costing for your housing. You need to know the right mortgage rate, property size, and location for you, as well as all the other costs you’ll incur when buying a new house. Learn about some of the things you need to consider when entering the housing market.

Mortgage Rates Can be Affordable—If You Do Your Homework

You can save up all you want for that dream house, but your best bet at home ownership is finding the right mortgage rate for your budget.

A good rule to follow in order to learn how much mortgage you can afford is the 28/36 rule. The rule used by lenders states that you could afford a home as long as your maximum household expenses are equal to or lower than 28 percent of your gross monthly income. Your debt-to-income ratio—should also level with or go lower than 36 percent of your gross monthly income.

Once you figure out how much you can borrow, think about what type of mortgage you’ll get. Determine if you’ll opt for fixed-rate or adjustable-rate mortgage loans; government-insured loans, or conventional home loans. Each type has its own advantages that are worth learning about.

Size and Location Matters

new home

Size vs. location is the age-old question when it comes to housing. Would you buy a nice, big estate in Utah that has a swimming pool and courtyard, or would you rather go for a shoebox in New York? Is a nice duplex in the suburb that has three bedrooms for you and your kids worth the long commute to your city job?

Some young couples skip starter homes and “go big” with their first buy because they’re likely in a more advanced stage in their career and can afford more. For others, moving to a place closer to their jobs might be better to save up on commuting costs, which can end up costing more in gas or health effects.

Prepare for Extra Costs

Don’t think your expenses stop at mortgages. Home renovations can add $6,649 a year to your housing expenditure. Millennials who skimp on size and quality for savings, in particular, buy homes that require a lot of care.

First-time homebuyers should also be aware of closing costs. These refer to fees associated with the period where ownership of your home is conferred to you. Homeowners association transfer fees, at times two months’ worth of property tax and mortgage insurance payments, and attorney fees are just some of the closing costs you should expect.

Whether you’re single or starting a family, remember to track your expenses, keep a realistic budget when it comes to housing, and treat your new home with love.

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