How to Buy a House in Your 20s
Updated: Jan 17
Be born rich!
But all jokes aside I won’t pretend this story doesn’t start with a lot of luck, fortunate and privilege on the part of B and me. We graduated college with no loans, no debt, and decent paying corporate jobs with upward paths. Nonetheless, we did this endeavor without financial backing from family and had to learn a lot along the way.
If you are already feeling overwhelmed and not even thinking about a mortgage, I suggest you start at step 1 which are the tips shared on my other blog post, catered toward early career individuals/ college graduates (not that they can't help any age group).
Ok so now that you know how to funnel your money toward success, here are a few more ways to accelerate your savings and ultimately buy a house.
How much did you save by age 30?
- < $1K
- $1K - $10K
- $10 - $50K
10 Tips for Buying a House in Your 20s:
Live at home or get roommates. Housing shouldn’t be more than 1/3 of your gross pay. Pay for a hotel room when you start to go insane or go on trips to see your friends, you’ll still save money overall. We lived at home for 3 years with my parents and this helped us immensely!
Do not take on any unnecessary debt. Pay off all your credit cards, ride that 2005 Prius until its death bed. The cleaner your credit history is, you'll be given better rates and approved for more borrowing power.
Don’t change your lifestyle. You got a huge raise? Congrats! Go have a nice dinner or buy a purse but the key is that you get a one time splurge. That checking deposit number needs to stay the same and that delta being deposited into your savings account - it’s now getting astronomically bigger
Make your money work for you. high-yield with a high yield savings account (I’m a huge fan of Marcus which is at over 3% right now). With inflation, you are likely LOSING money with it sitting in a regular savings account. If you want to buy a place soon this is a great way to keep your potential down payment pretty liquid.
Keep making more money. The truth is that we wouldn’t be where we are now if our incomes hadn’t at least doubled in the half-decade since college. Continue to ask what you need to do to get promoted and get a raise. The only one that truly cares about pushing your career along is yourself. This could be its own whole blog post but just know, especially if you are a female, your male counterparts are likely relentlessly asking about how they’ll get raises so now is not the time to be timid.
Find an area - Start exploring areas with a slightly farther commute than where you are. B and I spent many weekends driving around and scouting out new towns that were more financially attainable until we pinpointed an area we loved (hello East SF Bay Area!).
Remind yourself of what matters to you. For us it was owning a house and that meant driving our early 2000s cars until they die, not buying flashy things etc. Make a note of what will make you happy and don’t stray from it.
Take your time finding the one. We spent almost a year looking and stuck to our guns of what we knew would hold value and mattered to us (a larger lot, good schools, etc). Find a realtor that understands this and don’t let anyone push you into offering more. If it’s not worth it and you lose this house – your mindset needs to be “oh well, there are always more.”
Look for the worst house on the street. Remember that houses can be remodeled and it's crazy what some paint can do! If all the houses on the street are nicer, you can feel confident it will hold its value.
Deeply research all the costs associating with buying a house. Yes I’ve always wanted to own but the truth is, if you are someone that may want to move in a few years, it may not make sense to buy. Not only do you need your 20% down payment, you also need money to pay for closing costs, moving costs, and savings to cover your mortgage payments for at least 6 months.
So what you do you think? Are you someone who has always wanted to buy in your 20s? Does any of this sound feasible to you? What are you struggling with? Did I miss anything? I don’t have all the answers, but I’m always happy to help – IG @kaitlinrosef7.