Setting Yourself Up to Become a Millennial Homeowner

Many individuals believe that a millennial homeowner is an oxymoron, associating the generation more likely to spend their money on avocado toast and experiences than investments. But it couldn’t be further from the truth.

I personally decided it was time to purchase my first house after moving over 11 times in the span of nine years and becoming all too familiar with the ever-growing price associated with renting an apartment in Las Vegas. So last year  I set a goal to become a homeowner by October, as house prices were beginning to rise and steadily slide into a seller’s market. Spoiler alert, I was able to beat that deadline by three months.

Being aware of which way the market was heading, I had to do my research. I’m often shocked all of the programs for potential homeowners that go overlooked because buyers don’t want to take the extra time, or jump through a few extra hoops to save some big bucks.

I spoke with advisors, talked to individuals that had gone through the process to get honest feedback and compared as many options as I could and then weighed their pros and cons with my personal needs.  I ended up going with the Neighborhood Assistance Corporation of America, a 10-step program that involved a homebuyer workshop, housing counseling and above all, patience. You can read more about what I mean by that here.

NACA is geared towards first-time homebuyers with less than pristine credit or those recovering from financial hardship. While I didn’t fall into either category it had the strong selling point of not being caught off guard with additional fees at closing or other costly surprises. In fact, I actually ended up getting money back when I closed on my home.

Nothing forces you to take an honest look at your financial situation quite like combing through every account, every transaction and every lump of debt attached to your name (and all your aliases you may not even know you had), all while still trying to save as much as you can for your first major investment.

As soon as you decide you want to purchase your first home, start doing the following immediately:

  • Start making shock payments to your savings account: I would have loved to have known about this sooner in my journey, it makes such a difference. For example, let’s say that you’re currently paying $500/month  for rent, but know that you will be looking for a mortgage around $700/month. To save you from the “shock” of the increased payment, begin paying the $200/month difference into your savings account. In the process, you get used to paying the increased amount, and learn quickly if you need to make any lifestyle changes to accommodate, while quickly building your savings in the process.
  • Stop using your credit cards: Cut yourself off. You’ll regret looking back and having to explain in detail every purchase you made on credit. Plus it’s a great habit to start in general.
  • Knock out as much debt as you can: There are so many benefits to this even outside of easing the buying process of your first house. Do what you can so you can put that money towards something other than purchases of the past.

Implementing these habits early will make all the difference in getting started on the right foot. Another thing that helped was taking a good hard look at my possessions and what I wanted to bring with me into my new home. Honestly, it came down to what did I really need to move for what felt like the millionth time and what could I sell to help me move closer towards my goals?

A few non-monetary tips to get started down the right path:

  • Know your credit score: There’s plenty of places to check your score for free, including Mint, an amazing app to help you manage all your accounts, budgets and investments in one place. I’m completely addicted to it. This will give you a better idea of what you’re working with so you’re not surprised by anything you come across during the process.
  • Don’t make any major changes: That includes opening new credit lines, purchasing a new vehicle or changing jobs.
  • Don’t do anything without a paper trail: You’re going to have to account for everything, so having your ducks in a row before is going to save you a lot of time, frustration and writing out a million letters of explanation.
  • Get organized: Don’t hold yourself back by not having your documents in order.  This made a huge difference in being able to streamline the process to get into my home months before my goal. I kept an electronic copy of everything organized on Google Drive in addition to a physical file folder that lived in my car. I wasn’t about to let tracking down a W2 or bank statement hinder me from getting into my new home.   

Setting yourself up for success makes all the difference when you’re working towards your goals and definitely saves you some headaches later in the process.  It’s a lot of work but it’s totally worth it when you have those keys in hand… and a little equity under your belt down the road!

What do you find is the most confusing part of the home buying process?

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Written by ashleighrenay

7 comments

  1. This is a great posts and I agree with all your tips as they were helpful to my husband and I when we purchased our home this year. Wish I would of known about the shock method… that seems pretty cool and very helpful. about 8 months before we closed, we bought a new car. Our car literally broke down in the middle of the interstate. We thought that it would affect our ability to close when we did but it did not. I think the way it can affect your credit presents a risk, but if you are responsible and can still prove that you can handle saving and manage your credits…I think that is where we came on top. 3 months before we closed my husband was laid off. He got a new job, but as you can imagine…we were terrified as to what this mean’t to our homebuying process. Our loan officer told us that as long as it was in the same industry we would have no issues. Funny thing is..we closed a month earlier than planned. I say that to those who has unavoidable situations where you can’t walk the fine line the realtor or loan officer may initially give you. Take your time, be open and honest, and you should have no issues. Good luck to all your homebuying readers and congrats to you on this awesome accomplishment!

    1. First of all, a big congratulations Amandela! Life happens (usually when we least want it to) and it’s so wonderful that you and your family were able to come out on top, and a month early! I can’t imagine the stress you must have felt with all of that happening when you are in the middle of trying to get into a home. It sounds like you had a good loan officer working with you, thankfully. I love hearing others stories and I love your advice, patience and being open and honest will definitely get you far in this process, and life in general. I know I need to work on my patience, ha. Thank you, Amandela!

      Ashleigh

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