are Millennials - the generation born in the 80s and
90s - who are now getting married, starting families, and
stepping into the real estate arena for the very first time.
This is the same generation that grew up in a boom, followed
by a bust and an insane decade of home-price escalation, wide
scale under-financing, and subprime lending. Having witnessed
the housing market's wild ups and downs, Millennials may be
wondering what new rules apply in this evolving real estate
realm. Luckily, the 'new rules' can be discovered in the same
tried and true traditional rules of home buying that were
overlooked in years past.
Here are thirteen rules for Millennials looking to buy
(while avoiding a housing bubble burst):
- If you can't afford it, don't buy it.
- Don't jump into a home purchase blindly. Do your
about the area
, get advice from others, and study all the available
- No more creative financing: buy properties with
traditional 30- or 15-year fixed loans
- and know what your mortgage payment will be each
month for the entire mortgage term.
- Always put
- Whatever the bank says you can afford, subtract 20%,
and you'll never be house poor.
- You're not just buying a house, you're buying a
- It's harder to
get a mortgage
because qualifications are more stringent these days.
Keep great financial records, and be patient throughout the
- Don't expect the market to bail you out. That means no
overpaying for a house you can't really afford in hopes of
market appreciation making up the difference.
- Less is more. A smaller, practical, easy-to-maintain
house is the new, big, rambling mansion.
- Stay on top of your credit, and shoot for an
excellent score (above 750).
- Plan to stay in your home at least 5 years. Think
you'll need to sell before then? Keep renting until you
know you can stay put for a while.
- Budget for the ongoing costs of home
ownership - not just the monthly mortgage payment. Be sure
you have the funds for property taxes, insurance,
maintenance, upkeep, and even an emergency repair
- If you are questioning your job security and your
ability to get a new job quickly in the event of a layoff -
don't buy yet.
To a generation who saw risking everything and buying
homes with zero down as the norm, these rules may seem new.
But, as they say, everything that's old eventually becomes
new again. In this new era, Millennials simply need to look
back to get ahead and buy safely, sanely, and securely in the
current housing market
This article originally appeared on
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