Getting a Mortgage in Your 20’s

There are a lot of stories out there about how the average age of first-time buyers is rising. About how people are being forced to live at home with their parents until they are well into their 20’s, or perhaps even until they are ready to get married and have families of their own. You might have even heard about married couples that still live with one set of parents because they just can’t afford to live on their own. 

A more common problem is people finding themselves trapped renting. Rents, especially in big cities, are so high that even couples that both work full-time struggle to put any aside towards saving for a deposit. Even if they could get a mortgage, they can’t see how they will ever be able to save enough for the initial deposit. This can lead to a lifetime of renting. And, while renting does have its advantages, it’s not ideal to still find yourself paying rent as you approach retirement. It’s not even ideal to find yourself with a mortgage to pay off as you finish work, which is often what happens when we don’t buy until later in life. 

But, while these stories are familiar, and becoming more regular, they aren’t the only ways. While it may sound impossible, many people manage to buy a home in their 20’s. This can give them significant financial security, especially as they start to get older. It gives them options if ever they need a larger home, or to move to a new location, and it can free up finances for more exciting things later on. Yes, buying a house young is more difficult than it used to be. You’ll need to commit to saving and take appropriate steps to secure a mortgage, but it can be well worth it. 

Money & Mimosas

Learn About Mortgages

Mortgages aren’t one size fits all. In fact, there are probably more options than you think. Some mortgages will let your parents help you. Others are for people with low deposits. Read’s mortgage guide for more comprehensive information. Knowing as much as you can before you even think about applying will give you a much higher chance of being accepted. 

Explore Possible Options

There aren’t just different types of mortgage. There are also different ways to buy a house. There might be government programs in your area, designed to help first-time buyers take that first step on the property ladder. Options like shared ownership and help to buy may also be available, depending on where you live and where you want to buy a home. Research all possible options to find something that is right for you, your financial prospects and your lifestyle.

Make Big Cutbacks

Even with help and the right mortgage, you are going to need a hefty deposit, and the more that you can save, the more chance you will have of getting a mortgage. There’s also valuation fees, mortgage arrangement fees, survey costs and other associated costs of buying a house to consider, which can run into the thousands. 

To make all of this possible, you may have to make some significant cutbacks. There might be days when you can’t afford to go out with your friends. You might have to watch as everyone else your age goes on holiday, knowing that you can’t. Your holidays might be much smaller than everyone else. You might not even be able to justify a Netflix subscription. 

When you are young, this can be hard, and you might feel as though you are missing out. When this happens, remind yourself of why you are doing it. Spend some time writing a list of things that you’ll do when your mortgage is paid off before you are 50 when everyone else your age is still struggling.

Look at Housing Options to Save Money

Saving for a house would be easy if we didn’t have to pay for housing and utilities at the same time. Unfortunately, you have to live somewhere. If living with parents or other family is an option, ask yourself whether you could. Otherwise, look at cheap rentals, perhaps smaller than ideal, or further out of the city. 

Set Yourself Smaller Goals

The idea of saving tens of thousands of dollars can be intimidating. From your starting place, it can sound impossible. So, break it down. Give yourself a target for each year, and break that down into weeks. This should be a much more manageable amount and will help to keep you focused and motivated. 

Learn How to Budget

Budgeting isn’t something that is taught at school, and it’s something that many of us struggle with when we first tackle adult life, especially when you’ve got credit cards and loans being offered every day. Learn how to create a household budget, and more importantly, how to stick with it. 

Find Free Treats

Fun things and things that make you happy don’t have to be expensive. Join the library, and you’ve got access to all of your favorite books. Play board games with your family. Take a long bubble bath and enjoy walks in the park. Find free, or very cheap ways to treat yourself, and to reward your savings. 

Spend Time with Like-Minded Friends

The hardest thing is perhaps watching your friends spend freely. So, find some like-minded friends. Some other people your age who are looking to buy, or saving for something else. Share free days out with them, or encourage your existing friends to join you. 

Create a Visual Reminder

Visuals are a great motivator. Just thinking of the home that you’ll have might not be enough. So, build a mood board and stick it up at home. Fill it with pictures, motivational quotes and goals and take a look at it when you need a reminder. 

Keep Your Credit Score In Mind

One problem that young savers have is their credit score. They save enough to buy, but because they’ve always saved, have never borrowed and have limited spending, they have no credit score and so can’t get approved for a mortgage. Learn more about improving your credit score, and keep an eye on it as you save.

 About Money & Mimosas: Money & Mimosas was started as a passion project by Danetha, a former NFL cheerleader turned entrepreneur and financial journalist. After a brunch conversation with girlfriends, Danetha was inspired to launch a blog to explore her journey of becoming rich, sexy and confident.

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