Am I Too Young For A Mortgage? Average Buyer Demographics in the US
Is There an Ideal Age for Buying a Home?
Buying a home at any age can be a real undertaking. Because of the complexity involved in the process, there technically is no “ideal” age for buying a home. However, because owning a home impacts so much of one’s life, it is important for you to be in a place where you can not only afford a home, but are also prepared to handle everything that comes along with it. Read on to learn more of what we’re talking about, and make sure you’re prepared to become a homeowner, regardless of your age.
Mortgage Age Requirements
In the United States, an individual must be at least 18 years old before they can be eligible for a home loan. If the applicant is at least 18, then the mortgage lender cannot use age as a reason for a declined application. The two most common issues younger adults have when buying a home include having enough money for the down payment, and not having an established credit history.
Average Home Buyer Demographics in the US
According to this infographic released by the National Association of Realtors, the average home buyer in the United States is 32 years old with an annual income of $75,000. The average buyer places 5% down on a $190,000 single-family home in a suburban neighborhood. The average buyer also carries a lot of student loan debt, with a typical balance of $29,000.
5 Things You Will Want to Have Before Buying a Home
Buying a home is a good investment and will typically benefit you regardless of your age, but for everything to work out right, you need to be able to meet five conditions. These include:
- Being able to afford the monthly payment – Your monthly mortgage payment will most likely be a lot of money. You need to crunch the numbers and determine how much of a mortgage you can realistically afford. Don’t listen to the lender when they tell you how much you can get approved for; that is not always how much you can afford. In the end, you don’t want to start shopping for homes until you know you can afford it. Using a mortgage loan calculator is a good place to start.
- Being able to be approved for a good loan at a good rate – Just because you can get approved for a loan doesn’t mean it’s a good loan. Take the time to get your credit in good standing and build up some time at your place of employment, and you will increase the odds of being approved for a good loan at a good rate.
- Being able to afford the risks of owning a home – Your monthly home expenses don’t end when you make your mortgage payment. A home has a way of demanding much more from its owner. From routine maintenance to surprise emergencies, you will quickly learn how much money it takes to truly “own” your own home. Setting up and keeping an emergency fund will help you cover any unexpected costs, but you need to have the extra money available to deposit into it and/or make any necessary repairs.
- Being ready for the responsibility of owning a home – If you have thus far only rented, you are going to find owning a home places a lot more responsibility on your shoulders. From keeping your lawn clean and tidy to performing seasonal maintenance, you will be spending a lot of time “fixing up” and attending to your home. Remember: there is no landlord to call when something breaks; you are the only one responsible for everything.
- Being prepared to own the home long enough to recoup buying costs – It will take time before you build enough equity in your home to recoup the costs of the transaction. If you don’t plan on staying in the home for as long as that takes, then you shouldn’t buy because you will just be losing money. The same applies when it comes to market value drops. You need to be prepared and willing to stay in the home until the market recovers, so you can avoid taking a loss if you sell.
Looking to Buy Your First Home? Homes.com can Help
If you are in the market for your first home, then Homes.com is here to help. We have a free complete guide to becoming a homeowner that will explain the entire process in an easy-to-read, step-by-step fashion. Homes.com also makes it easy to find the home of your dreams. Just search for homes in the city of your choice and narrow down the findings using our filters. Homes.com is your complete home buying partner.