3 Home Buying Tips for Gen Z

Real estate

As part of Gen Z, affording a house may seem more difficult than ever these days. Quite simply, you don’t have the traditional economic advantages your parents and grandparents had. High interest rates and, adjusting for inflation, lower average salaries make the idea of buying a home a tough sell. 

But that doesn’t mean it’s impossible. In fact, non-traditional homeownership strategies and trends have emerged over the last couple of decades that have changed the game. Thinking outside the box can help you realize your dream of owning your own home. Here are three tips to keep in mind while you’re out house hunting. 

1. Know the Real Cost to Set Clear Goals

There’s no getting around it: at the end of the day, buying a house is a big purchase. But unlike buying a car or an expensive console, there’s more to it than one big price tag. Buying a home involves numerous expenses that total up to that final cost, some of which are ongoing. You should be aware of all these expenses before you pull the trigger. 

First and foremost is the downpayment. This is the initial cash you put down to buy a home as a percentage of its total value. Then there’s the closing cost: a percentage fee you pay, including attorney, broker, and lender fees. These fees alone can easily bump up the price of your house purchase considerably. Besides these one-time payments, there are also ongoing expenses you should seriously consider when buying a home.

See also  Real Estate Cash Buyers: Navigating the World of Direct Property Purchases

Unless you’re a unicorn able to buy their house in one fell swoop, you’ll likely be paying a monthly mortgage. Remember this includes whatever interest accrues on top of the base loan. Depending on where you buy, you may also need to pay monthly homeowner’s association and/or historic district fees. Also be sure to get a home insurance quote, as that monthly payment varies depending on what you need covered. There’s also regular maintenance to consider. As you can see, buying a home is much more than a one-time purchase, so be sure to understand the real numbers.

2. Take Advantage of Government-Sponsored Loans

Again, unless you’ve got Batman money, your mortgage will be your largest recurring home expense. That said, there are ways you can reduce that monthly number. The best news? You can do it on the government’s dime. Here are three different kinds of government loans to consider when purchasing a home.

First, FHA loans are intended to help you borrow money for a house if you have a lower income or credit score. They also have a low down payment requirement, ranging from 3.5%-10% depending on your credit score. Similarly, you can pursue a USDA loan if you live in a rural area with a population of under 35,000. Finally, you should consider a VA loan if you or your spouse are part of the military. 

One appealing aspect of government loans is that you can typically qualify for them much more easily than conventional loans. That’s because you may still be eligible for them even if you’re in a lower income bracket or your credit score isn’t squeaky clean. Consider applying for a government loan to help you get your foot in the door of home ownership. 

See also  Real Estate Cash Buyers: Navigating the World of Direct Property Purchases

3. Think Different

Just because you’re buying a house doesn’t mean you need to go big or go home. Depending on the amenities you opt for, a prefabricated tiny house will run about $60K on the high end and just $30K on the low end. You can bring that number down even further if you build one yourself using recycled materials. And with a plethora of information, videos, and tutorials, building a tiny home is entirely within your reach.

If you’d prefer your tiny home on the go, then put your roof and four walls on wheels. You could either build a tiny house on a trailer as they were originally designed. Or you could transform your van to be your home and the world to be your backyard. With over 260 million posts on TikTok, van life is alive and well. By creating your own mobile home you can also connect with millions of other like-minded people.

Additionally, consider adapting your image of what home ownership might be. You could significantly increase your income after buying by turning your home into a duplex. Or you could put your tiny house-building skills to work and make a guest house for short-term rentals. Keep your mind open to the possibilities that could transform your house from a liability into an asset.

Home Ownership Is Still Possible

Despite the fact that houses are more expensive than ever, owning one — even as a Zoomer — is still possible. Granted, you may need to explore non-traditional avenues to afford one. But that doesn’t mean the idea itself is off the table. Expand your idea of what home ownership is and think outside of the box. By doing so, you may even be able to turn your home into an asset that provides you with a secondary income stream. 

Rate article
Thought for Today
Add a comment