According to a recent report by credit bureau Experian, the average age of the first time homebuyer is 34 years old. Buying a home in your thirties tends to be easier as you have had more time to save for a down payment, establish good credit and have a better idea of your life’s path. Here are some helpful tips to consider if you are nearing a home purchase.
There are just a couple of primary concerns that one should ask themselves when they get close to being ready to purchase a home. For one, can the buyer commit to any location for the next five years. You may not want to buy if you are debating a relocation from a job or growing family soon. Next, you will want to forecast typical ownership costs of upkeep. See if you can comfortably afford what will be necessary to invest in the home regularly.
Is This Your First Home?
If you already bought a starter home in your twenties then you may be in a good position to upgrade. Take a look at your mortgage balance and weigh that out to what you anticipate clearing if you were to sell. In today’s market you may have a good amount of equity to help put towards the next home.
Consider Home Needs
A lot of change can happen in one’s thirties. This is a time when careers change and families grow so ask yourself some of these questions. Will the home accommodate you if you work from home? Will it have enough space or be in a good school district if you plan on kids? Or ask yourself if it offers a good location to all of the conveniences in your regular lifestyle for the things you like to enjoy.
“You’re in a growth stage in your 30s,” adds Haub. “In your 20s, you buy an affordable home just so you can get a stake on the market, keep control of your expenses, and build your savings. In your 30s, you need to buy what you need to raise a family.” says Danielle Hale, chief economist for Realtor.com.
If you can afford a slightly larger home then go for it so you can grow into it. However, if you are spending more than a third of your income on your home then it may be too much for you to afford comfortably.
The first place you should start is to consult with a professional mortgage broker. Only a mortgage broker will be able to review your entire financial situation from income, debt and credit to alert you to just how much you can afford. While they will tell you “on paper” what you can secure for a home loan, you will then have to be realistic with yourself and see how comfortable you will be with taking on the home purchase as you factor in your lifestyle and personal spending habits.