NEW YORK (MainStreet) Your friends are blowing their money at the bar or on tattoos, expensive clothes or a car they can't really afford. You? You're the responsible one. The one who's socking away money to buy a house, even though you're just shy of your twenty-fifth birthday. You've read about how it beats renting. Still, you find the prospect daunting: how are you going to get a loan? How are you going to afford the down payment? What kind of house does a young, single professional such as yourself need?
The good news: It's a lot easier for young people to get into a home that might not be the house of their dreams, but that's a good first step on the road.
The Biggest Problem You'll Face Buying a Home
Richard Bridges, an Associate Broker with ERA Blue Diamond Realty in Woodbridge, Va., thinks the biggest hurdle is also the easiest to overcome.
"The lack of education toward the home buying process is the biggest obstacle," he says. There are a lot of misconceptions when it comes to buying a home, particularly with young, first-time home buyers.
President of Shore Mortgage David Hall agrees.
"Most people think they're going to need way more money than you actually do," he explains. "The days of zero down are obviously gone, but you can still get down payments as low as 3%."
Plan for All Costs
Hall is quick to point out, however, that most young people fail to account for all the costs of buying a home.
"They don't budget for furnishing and other costs like power, electric and water," he says.
TJ Rubin, owner and managing broker of Fulton Grace Realty in Chicago, concurs.
"In Chicago condos are very popular," he says, adding that buyers should also keep the cost of home inspection in mind.
Still, some costs that might intimidate younger home buyers out of the market are much ado about nothing. Rubin notes that costs such as title, lender and attorney fees are typically paid out of closing. Your mortgage broker can help you to budget for those once you begin the process.