For millennials who are considering or have begun their search for their first home, there are some important things you must consider.
1. Low interest rate: Millennials will benefit from attractive interest rates, which hit a 14-month low in March.
2. Owning a home is an investment that will likely appreciate over time: A buyer needs to commit to owning a property for generally at least three years to allow for market appreciation to outweigh the closing costs of buying and selling.
3. Finding the right home: Before you begin shopping for a home, figure out what you can realistically afford. A place that needs some cosmetic work may be more affordable and give you the opportunity to add value with home improvements over time.
4. Hidden costs: These costs include insurance, property taxes and closing fees, and can add up to 5% of the home price.
5. Your 'rainy day' fund: Make sure you have enough money set aside to deal with unexpected costs that inevitably come up over time. You should anticipate spending 1-3% of the home’s purchase price on annual maintenance and upkeep.
6. Location matters: It’s important to understand that where you live plays the largest role in determining the value of your home. Instead of going for a dream home first and foremost, start with an affordable property, and trade up later.