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By Barney Whistance
Special to the Financial Independence Hub
In the wake of a new generation now growing up and planning to settle down, one of the biggest concerns for them is finding a place to live. Finding a house for you and your spouse to live in is one of the most important decisions that you will have to take. Therefore, it should not be taken lightly. There are a lot of factors for you to consider when you set out to purchase or get a house on mortgage. You have to be certain about your choice as you will be the one living with it for a major part of your life.
Your financial situation is the biggest aspect you have to consider when making a decision like that. Once you know your financial point and how much you can afford, you must decide on where you want to live. Planning everything step by step always gets the work done more smoothly and also makes your choice easier.
Finances
Talk about your finances with your partner, so in order to set a budget, you already know how much you both have. Once you have done the initial financial scrutiny, you can decide which plan you should be applying for. Make sure all your past student loans or some other loans have been cleared and you are free of other debt. If you are an unmarried couple, you would be treated as two different individuals (in the United States). However, if you are married you will be treated as one. You must also talk to a mortgage lender, they can help you with understanding how much mortgage you can apply for. There is a fixed-rate mortgage that allows you to pay a fixed amount of interest. Then there is an adjustable rate mortgage, which will demand low payments at first, but as time progresses the interest rate will become higher. Then there are interest-only payments, which allow the lender to have flexible payment options, but it will not build equity for you.
Commitment
A huge part of buying a house involves deciding at what time in life you want to buy one. This decision could be taken at any stage in your life. You may have been exposed to the marketing tactics of real estate agents who have bombarded your inbox and social media feed with the houses they are selling.
But being a millennial you are probably young right now and may be just planning to get married or have recently gotten married. This means it must be your first time buying a house. It may be daunting at first, but you need not fret over it. The only thing you should think about closely is how long you plan to stay there. This might be your biggest investment to date, and if you don’t plan on staying in that house for too long then it is wise not to plan on buying a house. Staying in a house you have bought for less than three years will result in you losing money.
Size of the home
It’s usually when a person is about to get married or raise a family that he or she plans to move into a house. So, it is always better to have a bigger home in order to have that extra space so your kids have their own rooms in the future. Even if you are not planning to have kids, it is still better to have an extra space in the house. It could be used as a guest bedroom.
Signing the house deed
When writing down the name on the house deed, the buyer is presented with a total of three choices. If you are holding the title as the sole owner then that person is going to be the only one who gets the equity, regardless of the fact that both of you have taken part in paying the mortgage. If you the sign the deed as joint tenants, then the house will belong to both the people written in the deed. If you are signing it as tenants in common, then you have to decide a percentage as well on who gets how much after the house is sold to another homeowner. Although in the last case the ownership will not transfer to the spouse if the other dies, but instead will be transferred to the heirs specified in the deed of the person.
Energy Efficient Houses
A rising trend for new house hunters is that the house must be energy-efficient. No one wants to have a house that draws so much money just on monthly bills and leaves so little in savings. That’s why people prefer having houses that are modern and have the latest technology installed. Now houses are equipped with the technologies that can help you control your house electronics just through your cell phone or by remote. This way you can increase or decrease AC temperatures or heater temperatures when you are not at home, which in turn will lower your cost of electricity.
A millennial must have all these priorities set before he or she plans to buy a home. Not having these ideas clear in mind before you set out to buy a house will result in even greater confusion. The ever-developing technologies and more flexibility in loans have even provided millennials with the means to explore new options.
Barney Whistance is a Finance and Economics blogger interested in the global economic climate. Apart from majoring in Finance, he is a Chartered Accountancy Student and planning to complete his Ph.D. in Finance before he turns 30. For more updates follow him on Twitter @barneywhistanc1
