First off, one is never too young to plan on buying a home of their own. A parent teaching their young child the benefits of home ownership will often lead to a conversation about college and being a professional. As a child gets older, even college age, often times they become self absorbed and don’t realize that the actions they take in their twenties often lead to the ability to buy a home or not by how well they manage their credit. Therefore, buying a home often takes years of preparation and planning. Here are five principles associated with buying a home.

The first principle is to create or have good credit. As a young adult, or at any age, having good credit habits are paramount to having good credit in the future. A young adult might think there is little they can do to establish credit, but they are wrong. Banks will give credit cards with an extremely limited line of credit to even teenagers. Using a credit card wisely and repaying it on time, or paying it off every month is a great start. Also, taking out a loan for the first car and paying EVERY payment on time and in full will boost credit dramatically. Other forms of credit building include, rent in ones name, utilities in one’s name, and student loan repayments.

The second principle to planning to buy a home is to have the money saved up for a down payment and or the closing costs. Although some lending institutions will lend to a first time home buyer with sometimes no money down, that is not always the wisest decision. The higher the down payment, them more the monthly compounded interest will decrease. Having more money for a down payment will allow for a quicker and higher pre-approval and will allow for a higher rent. No matter what, the closing costs associated with taking out a loan cannot be avoided. Closing costs average around two percent of the cost of the entire loan, a d can be as high as eight. One must have the money saved up to pay off that large of a sum.

The third principle is to do some research. Buying a home is extremely complicated and has many different languages and aspects to the industry. A new home buyer can be taken advantage of if they do not know what the process is, or what the different professionals are talking about. Go online, or to a local library and learn everything one can about real estate before adding practical experience the resume.

The fourth principle is to get out and look. By getting out and looking it is easier to formulate a list of things that one definitely wants are appreciates. Learning about the different neighborhoods, their benefits and drawbacks, is much easier assessed when actually in the area.

Lastly, talk to those who have practical experience. No amount of research can substitute for experience. Parents, relatives, realtors, grandparents, etc. will usually have lots of practical experience and are more than willing to impart it with those they care about.

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Category: Real Estate
Keywords: homes, real estate, buying a home, selling a home, realtor, realtors, loan, mortgage, foreclosure, s