No matter the age or life stage, everyone makes mistakes when it comes to home-buying. Certain age groups are more susceptible to particular missteps than others. Here are common mistakes homeowners make at each age, and a few ways to avoid them.
20s: Getting the Wrong Type of Mortgage
People in their 20s are just starting their careers and usually have less money saved than older homebuyers. For these folks, paying less for a mortgage is not just a priority, but a necessity. This can be a bad thing if buyers get into an adjustable-rate mortgage (ARM) thinking they will earn more money down the road, but if that doesn’t happen and interest rates go up in five to seven years, they’re going to see their mortgage rates double or even triple. Before leaping into an ARM with just a dream of a house and a hope for a bigger paycheck, consider other cost-saving alternatives.
Along with popular programs like FHA loans and VA loans, there are other lesser-known initiatives geared to homebuyers on a fixed income, for example home-buying assistance for law enforcement officers, firefighters, emergency medical technicians and pre-kindergarten through 12th grade teachers. Along with federal money, there are also state-sponsored grants for first-time homebuyers, which you can typically find on your state’s website.
30s: Not Thinking About the Future
Homebuyers in their 30s blunder by not considering a future family when they’re standing in the middle of downtown condo with gorgeous views and access to a rooftop pool. While snagging the ultimate bachelor or bachelorette pad might seem alluring, it can also cost you money down the road. If you plan on having a family, it’s important to consider that when you’re home shopping, even if you’re currently single. Ask yourself these questions before buying a home:
Who do I imagine living with in the future?
Where do I imagine living?
How do I imagine living?
Those answers should be an integral part of what you look for in a home. For example, if you think you might want kids or even a dog, you’ll probably want to choose a home with a backyard versus one near a great nightlife.
40s-50s: Overestimating Your Budget
In your 40s and 50s, you tend to have more money, which can lead to overestimating your budget and buying a house you can’t afford. One way to avoid this is to figure out your lifestyle comfort level. Figuring out your budget is a critical step for buyers of all ages. Even experienced homebuyers can make the mistake of spending at their limit, which can mean making sacrifices that they weren’t prepared to make. The takeaway for buyers in their 40s and 50s is to leave room in the budget for things they aren’t willing to give up—for example, private school for the kids.
60s and up: Falling in Love With That Vacation Home
Many homeowners in their 60s are retired or getting ready to retire. Among the many decisions retirees make is where to live. While some choose to stay where they are, many plan on moving to warmer climates, or even another country. However, Relocating and buying a home is an expensive process, so retirees should be sure they familiarize themselves with a new place before buying.
Before buying a new house in your vacation paradise, be sure to visit the area in every climate. For example, Florida is great in the winter, but many people might not be comfortable in the humid summer months. The same goes for Northern areas—what’s blissful in one season can be awful in another.
Source: RisMedia and Bankrate.com