Being a part of a young family is an exciting time in your life. There is so much growth that happens during this period. It’s easy to get swept away in day-to-day events, but as the leaders of your young family, it’s important to be thinking ahead to the next step. One of those important steps should be homeownership.
Put Down Roots
Location is one of the most important parts of choosing a home, and for good reason. The location of your home will have a lot to say about where your kids go to school and the quality of their education. While that may seem years away for brand new families or those with babies and toddlers, the time will come sooner than you think, and young families are starting to make the transition to a more permanent residence. Millennials are responsible for 45 percent of new home loans. If you want to start putting down some roots for your kids, it’s not a bad idea to do it while they’re still very young.
Rates Are Low
Part of the reason why so many people are making the transition from tenant to homeowner is because of the low interest rates that are currently available. Buying a house is expensive, so much so that it’s almost unheard of for people to buy one without a mortgage, especially first-time buyers. The current interest rates are low enough that it’s helping to offset the rising cost of the homes themselves. Taking advantage of them now with a fixed-rate mortgage means you won’t be subject to the fluctuation in interest rates you’d inevitably experience with a variable rate mortgage when rates go up again.
It Takes Time to Save Up
It’s important to note that while you don’t always need a down payment, it’s often a good idea to have one. Traditional wisdom suggests that a 20% down payment is a good idea. There are certainly advantages to a higher down payment that can make it a smart move. Of course, that means that you would need to come up with $60,000 for a $300,000 home, which is no easy feat. It takes time to save up that kind of money, so it’s important to start saving now if you haven’t already.
For most young families, making the transition from tenant to homeowner takes some work and advanced planning. It can be great to start putting down some more permanent roots while rates are low, but it can take time to save up and be in a place where making that transition makes financial sense. If that’s a transition you want to make, start thinking about how to make that happen for your family now.
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