It seems these days that if you’re in your 20’s, it’s almost presumed that you’re renting your home, not paying off a mortgage. With the issues so many have had paying off student loans and getting their footing in the job market, especially given the events of the past year, that’s not exactly surprising that buying their first home not on their radar – but it should be.
A new day is dawning in the Real Estate market, and for many young people homeownership became a more realistic goal this year than ever before. Thanks the low interest rates we’ve been seeing for home loans, buying now and fixing your rate at those low percentages will put you in a good financial position for years to come.
Don’t believe yet? Listen to the testimonials of these three new homeowners under 30 who took the leap this year, and decide for yourself.
The first of our 3 young gun buyers is Joe, who was always planning to buy a home after college, but had originally planned on waiting a bit.
“I wanted to buy a house because I felt it was time to live on my own and move on from living at my parents house. I wasn’t going to jump right into a house though.”
The world has a funny way of changing your plans, though: The low interest rates brought on in the last year really lit a fire underneath him to move on that plan ASAP. So Joe decided to sit down with Mary to discuss how possible it was for him to buy a house sooner rather than later.
Joe paid $157,500 for a single home in Collegeville. The property sits adjacent to the Perkiomen Creek, and he got it at $30,000 under the asking price – an extremely good deal.
Living in Collegeville, Joe will have no shortage of fun and interesting things to do – from hiking the Perkiomen Trail (or kayaking on the creek), to exploring Providence Town Center and all the shops it has to offer (including the Collegeville Cinema, a full-service movie tavern where you can enjoy food and drinks while taking in the show.) If he were feeling adventurous, he could even go for a hot air balloon ride with the Sky Riders Balloon Team!
Many young buyers are incredibly nervous at the start of the process of buying their first home – and that’s totally normal! Joe also mentioned feeling this nervousness, but said “as soon as we began I felt confident everything was going to work out.”
Joe broke down the steps he went through, in the hopes that laying it all out step by step will help ease other buyers’ nerves – after all, most of the time that fear is simply the uncertainty of not knowing what’s supposed to happen next!
“First I had to find get pre-approved for the mortgage so I would know my budget. From there it was just about finding the right house for me.”
That, Joe says, was not difficult at all.
“Mary understood exactly what I was looking for and knew how to go about it. I bought the first house Mary showed me, I didn’t even need to look at another one.”
Once I found a house I liked, Mary guided me through negotiations and helped me close the deal.”
Of course, these processes are rarely butter-smooth – there are bound to be a few hiccups here and there, especially as far as negotiations go – but that’s exactly what your realtor is there for. In Joe’s case, having a realtor came in clutch during the negotiation process.
“The seller and I had some disagreements over items in the home inspection; The seller felt he should not have to fix a few safety concerns, such as faulty GFCI outlets, and a junction box dangling from the basement ceiling. We settled on him replacing what is required by law and an extra $500 towards various other repairs.
“I also had some concerns about the hot water heater’s age, which the seller also did not want to replace. We negotiated to get him to pay for a one year home warranty, rather than replace the water heater. Once those were resolved, everything continued smoothly.”
Joe knew about the fact that there are loan programs that allow you to make just a 3% down payment on your home, rather than the 20% that is considered “conventional,” but he was still anticipating many more fees and things he would have to pay for than there actually were. In the end, it was much more straightforward than he expected.
Of course after you go through the whole process of buying a home, the reward is that you get to live in it, with no landlord or family members setting the rules for you. Joe went from living at home with her parents to living in a house that he owns, and he is loving everything that comes with that.
“The biggest advantage for me is the freedom, I like not having to answer to anyone besides myself.
“My favorite part of my house is really the freedom itself. I like knowing that this place is my own and I can shape it into whatever I want it to be.”
Now, none of this is to say that buying a home is an easy choice everyone should be making – even in buyers who feel they are ready, there are still going to be drawbacks. The main question is whether those drawbacks outweigh the advantages in your mind.
For Joe, the main drawback was the cost of living.
“Compared to living with my parents it is obviously much more expensive.”
This consideration is an easy enough one to make; simply ask yourself, “would I be willing to pay this much to have all the added freedom?” If the answer is yes, and you can afford it, there really is no reason to hold yourself back.
Plus, if your main consideration is the cost, you should remember that your home isn’t a one-time purchase that only gives you the utility of the thing you buy, like buying a car or a phone. Buying a home is an investment – it will pay for itself in the future, when the natural course of time causes homes in general to be worth more. Joe understood this much earlier in life than many:
“If you were to rent an apartment, you are simply paying the owner without advancing your own situation. At least if you own the property, your monthly payments are going towards the mortgage.”
And the mortgage is a loan – so paying it off is like paying rent, but rent that will help your credit score, and rent that you’ll be able to get back (and then some, in most cases) when you go to sell the house later in life.
Joe also thinks you should know:
“Mortgage payments are generally cheaper than rent in a nice apartment! I did not learn this until a few years ago, and now I pay a few hundred dollars less a month in mortgage than all of my friends do for their rent.”
And remember, while nobody’s saying you’re under the gun, time is still of the essence – the earlier you make an investment, the more money it will make you. Doing things early will always put you at an advantage, and the advantage will be greater the earlier you do it.
“Since I am younger than the average buyer, I have more time to continue to pay off the mortgage. This also means it will theoretically be paid off at a younger age as well. Once the house is paid off, I will be in a very desirable place financially, and that will continue to benefit me for the rest of my life.”
Next up, we have Emily. Emily started renting a place and quickly realized it was simply too expensive, and that a mortgage would actually be cheaper.
“I moved to an apartment by myself back in July. When I realized that I could afford a mortgage, it felt like a better option for me to make an investment instead of constantly paying someone else to live in their property.”
Like Joe, Emily understood very quickly that if you can afford to pay a mortgage on a place, paying rent is just silly – especially on one roughly the same size. With this in mind, she sat down with Mary to discuss buying a condo in Norristown.
Like Joe, Emily thought the process of buying her own home was going to be a lot more complex than it actually was.
Emily loved her old apartment, but there were simply too many drawbacks for her to contend with to make it worth continuing to live there, even before she found out that a mortgage would be cheaper than her rent.
“I am definitely more excited about my financial future now. Knowing that I can make money off of my property in the future is rewarding. The homebuying process has helped me to understand budgeting and planning for other future investments. I am only 26, and I am happy that I started out this young.”
The last of our three young homeowners – and the eldest – is Chris. Chris didn’t feel rushed to move out or like there was some kind of ‘now or never’ urgency – he really just thought it was about time he got his own place.
“I wasn’t going to jump right into a house though; I waited for the right deal to come along before I would move out.”
Chris knew he didn’t have enough saved up to purchase a house on his own, but that didn’t stop him – first of all, he worked really hard to save up for a year, watching everything he spent so he could put all that extra money towards his home.
He also got a little help from his grandparents – and while some may want to keep that on the down-low, Chris knows that it’s nothing to be ashamed of. Getting help from loved ones who want to see you into a better life is just one of the many things family is there for. There is never anything wrong with getting help.
Chris knows that full well – that’s also why he took advantage of the 3% down option offered on his mortgage, rather than the 20% that so many think you need to save up. That alone was a huge help in getting him where he wanted to be.
Chris paid $250,000 for a lovely house in Media Borough. He bought the house from his grandparents, who decided to help him out with the purchase, essentially giving their grandson the gift of a little bit of the equity they had built up over the time they owned the home.
“I would’ve never been able to afford a house in Media by myself,” Chris said. “It’s a hot place to live. If I found a house within my price range in Media, if I didn’t act that day it was gone. I was striking out with a lot of places.”
Media is an expensive area for a reason – it’s full of fun and interesting things to do. From the variety of interesting small businesses on Main Street to the number of local farms and parks, he’ll never be bored. He could go take in a show at the Media Theatre or the Hedgerow Theatre, or check out the Pennsylvania Veterans’ museum.
Outdoors, there is truly a smorgasbord of different places he could explore. He could go pick his own fruit or explore the farm market at Linvilla Orchards, have a picnic and see a performance at Rose Tree Park, see the butterflies at the Tyler Arboretum, or even go for a swim at Ridley Creek State Park in the coming hot summer months.
Just like Joe, Chris had some general anxiety about the process of buying his first home, but those fears went away as soon as he sat down with Mary.
“It was scary at first because I had no idea what to expect…once I talked to Mary, I wasn’t scared anymore. Once she talked to me and gave me all the information it made a lot more sense – she made me feel excited to begin the search for my house.”
Chris’ plan wasn’t always to buy his grandparents’ house – he actually did a bit of searching before he landed on that.
“The process started with looking at the area I wanted to live in then to establish the range of houses that I could afford in that area. Mary set up a portal to see houses that we’re going up for sale in the area I wanted to.”
Once Chris realized he could buy his grandparents’ house, keeping so many fond memories there in the family, he knew he had found his spot. After that, Mary helped guide him through all the steps he would need to take for the settlement – because even when you’re buying from someone you know, there are plenty of legalities involved.
“Mary was wonderful from the beginning to the end! She explained all the processes that would happen with settlement, exploring new homes, visiting homes and during a pandemic wasn’t very easy.)
“When I had questions about anything she always was able to give me answers or direct me to someone that could give me the answers. I could not thank her enough for all of her time and effort she put in to help me get the house.”
As we said before, Chris didn’t feel pressured to get his own place – he just felt it was time, and he was ready – and moving into his own place proved him right.
“My living situation was good before I moved out. My parents never forced me to do anything, and they were very generous to me. They made me feel like there was no rush to move out and that I could stay at home for as long as I wanted to.
“I feel the advantages are now that everything is my own. Anything I want to do or change is for my own house, and that makes me very happy. My favorite thing about my new home is not exactly about the house, but that I am still close to my family that I can see them whether I want!”
Chris wants to share his newfound happiness by making it clear to others like him that buying a home possible – even if you don’t end up having Chris’ luck in your desired neighborhood, there is always something else out there.
“I think people my age should be looking into buying a house. The biggest advice I can give them is to live within your means, you don’t want to buy a house and be house poor because you went with the most you can afford.”
And of course, the biggest quantifiable reward of this process is the stake you now have in your neighborhood, market, and the world. In many ways, buying your first home is one of the most major steps into adulthood, and that’s huge.
“I am excited about my financial now that I am a homeowner, especially around tax season. (I will just have to be more cautious on what I spend my money on and to make sure I keep on saving for my next big purchase!)
Chris said that if he could leave you with one final message, it would be this:
“All people my age need is motivation and they can do whatever they want.”
Are you convinced?
If you’re a young person just getting your footing in the world and you thought that buying a house was still way far off into your future, we hope reading about these experiences made you think again. There is no age limit on real estate.
If you want to find out if you’re a lot closer to homeownership than you think, please contact Mary Byrnes via phone or email – she will be more than happy to help you learn about your options, and to answer your questions about the process, to decide if now might actually be the right time to buy your first house.