Buying your first home is a considerable investment that more and more individuals are postponing their dream of homeownership. A lot of Millennials are waiting until their mid-30s to even 40 to become homeowners. It is fair to say that the new generation, Gen Z, could wait even longer if things don’t change.
Can we make homes more affordable? Unfortunately, the price is the result of long-term inflation. But you can make the purchase easier.
Don’t borrow more than you can afford
The mistake number one that will cost you your home: Biting more than you can chew. It is easy to think that you can buy any home as long as you get a mortgage. While most people have sufficient financial management experience to make the right call, a lot of young adults never need to handle any long-term loan payment until they bought their first home. Therefore, it is easy to see how they might sign up for monthly payments they can’t afford. If you’re uncertain of how much you can commit to paying, have a look at the tool on MortgageCalculator.Org that can help you visualize your expenses. Another tip for this is to start with known monthly payments, such as food, fuel, and expected energy costs, and use the remaining sum as a starting base for your mortgage.
Make a big deposit
If you are looking for a property, you will be required to make a deposit that ranges from 1% up to 10% (or sometimes more) of the price tag. You have to save up for the money deposit. However, the more you can save, the higher your deposit will be. Mortgage deals are more favorable if you can afford to make a big deposit – aka start saving early!
Create a rent-friendly office space
This year has taught us something important about the workplace: Most people can now work remotely thanks to the pandemic. Unfortunately, not everyone can work from home. But, you can monetize your property by converting your unused space, such as the garage or basement, into a home office. You can rent the office for professionals looking for a virtual workplace. Ideally, you want an en-suite bathroom and a small kitchen area – with the essential appliances for lunch and coffee – to boost your office space. A separate entrance and a secure broadband connection are a must.
Rent out your spare bedroom
You can turn your spare bedroom into a money-making venture. Using Airbnb, you can advertise your bedroom for guests, short or long-term, depending on your preferences. While there are some risks inherent to the Airbnb community, it is fair to say that with some cautious preparations, you can find the venture rewarding and enjoyable. A lot of homeowners rely on rental income to make mortgage payments more manageable.
Make a few frugal choices
Last but not least, you need to budget ahead for mortgage payments. In other words, it’s important to simplify your lifestyle to avoid unnecessary expenses. A frugal approach is the key to saving money, with simple decisions such as using a programmable thermostat or creating a meal plan before buying your groceries. You could save a lot of money without ever feeling like you are depriving yourself!
In conclusion, don’t let the mortgage burden scare you off buying a home. While mortgage payments need to be considered carefully, you can make these more manageable and affordable for your finances!
Be safe out there.
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