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7 Mistakes Millennials Make When Purchasing A Home

7 Mistakes Millennials Make When Purchasing A Home

Millennials – they’re the generation between 18 and 35; the new young professionals; the recent graduates, and they’re also coming into the housing market in droves. Usually, they’re also first-time homebuyers, which means that they have the potential to make mistakes in the home-purchasing process.

Here are the top seven mistakes millennials make when they purchase a new home. Whether you consider yourself part of the generation or you’re just looking to ensure your home search goes as smoothly as possible, these tips should help any potential homebuyer.

Mistake #1: Not Getting Pre-Approved

Buying a home should never start with searching for listings online. If you’re serious about buying, start by meeting with a lender. Although that seems backwards to many first-time homebuyers (“Why would I talk to someone about getting money for a home I haven’t found yet?!”) it’s going to help you in the long run.

When you get pre-approved for a mortgage, it means you have met with a lender and showed them your credit report, debt, income, and assets in order to provide a picture of your finances. With that information, they will draft a pre-approval letter – something that tells you how much money you’re potentially qualified for, but isn’t a guarantee of money. Realtors look for a pre-approval letter when working with you because it shows you’ve done your homework and you know your price range. Sellers expect a pre-approval letter with every offer because they know there’s a better chance of you actually getting the mortgage to buy the home.

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Mistake #2: Not Hiring A Realtor

In the age where you can buy virtually anything online, many millennials believe that they can purchase a home through an online listing service. They look at Zillow, Redfin, and Trulia, find the perfect home, and contact the listing agent.

Let’s stop there. This isn’t to say that looking online isn’t a great idea to see what kinds of homes are in your price range. In fact, it’s an excellent way to be prepared to look for the type of home that’s in your budget, including size and location. However, if you think you can do all of your home shopping by yourself through the internet, think again.

When shopping for homes on online listing services, you’re not really getting the full picture or price. The home might have smells, sounds, or sights that you’re not seeing while looking at the photos on the listing. Not only that, if you’re interested in a home and reach out to the listing agent, they’re not going to have your best interests at heart. They’re legally bound to the seller, so you may not get the best deal. That’s why it’s extremely important to first talk to a mortgage lender to see how much you could afford, and then work with a realtor who can help you avoid paying extravagant amounts of money and walk you through different options of homes that are within your price range.

Mistake #3: Buying More House Than You Can Afford

While looking online for a home, another mistake millennials make is looking at the estimated mortgage payment and thinking, “Hey, I can afford that!”

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Many times, the monthly mortgage price on the listing doesn’t account for insurance, taxes, HOA fees, Personal Mortgage Insurance if your down payment is less than 20%, or other utilities and maintenance costs. Purchasing a home costs much more than the dollar amount listed there – it’s expensive and if you end up buying more house than you can afford, you risk becoming “house poor” quickly. That means you pay more money monthly for a house than you can reasonably afford.

Many mortgage lenders will pre-approve you for a mortgage that’s much more than you actually could afford on a month-to-month basis. You can’t rely on them to provide you with an accurate amount of money that you’ll be spending each month on your home. You have to do that on your own. Look at how much money you spend on food and transportation. Then, look at how much you’d be spending on insurance, taxes, closing costs, and maintenance. Add a little bit for savings, just in case, and you have a better picture of your budget each month. If you can afford everything that goes into a home, you’re set to buy. If not, you may need to start looking at homes in a lower price range.

Mistake #4: Not Shopping For A Mortgage

Once you find a home, make an offer, and start the closing process, you need to shop around for a mortgage. Many first-time homebuyers assume that they have to go with the lender that provided them their pre-approval letter. Not so! You can shop around for the best interest rates and terms that fit with you and your budget. In fact, not shopping around for a mortgage can end up costing you tens of thousands of dollars in interest.

Mistake #5: Not Attending A Home Inspection

This is one of the biggest mistakes you can make when purchasing a home. If there’s one thing you take away from this article, let it be this: attend the home inspection. Do not let your realtor go without you to look over the inspection. Do not send your mother or brother or second cousin on the home inspection. Take off work and walk through the home with the home inspector. In fact, make sure you’re involved with the entire process, including hiring your own personally vetted inspector (or two or three, depending on the first report), walking through the home with the inspector, asking them questions about the state of the home, and finally reading the inspection report.

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Why is this such a sticking point? A home’s value isn’t just about the property it sits on – it’s also about the state of the appliances, systems, and foundation that makes up the home. If the roof is failing, you’re going to end up spending major amounts of money on it sooner rather than later. If the furnace has cracks in the heat exchanger, you’re going to have to shell out a lot of money to replace that. You need to be informed as to just what you’re getting yourself into when you purchase a home; what costs you can expect in the future and what parts of the home need to be repaired or replaced by the seller (or the price reduced) before you go through with a sale.

As a side-note, if your realtor tells you a home warranty will cover most of the problems in the home inspection, they are misinformed. Most home warranty companies will not repair or replace broken-down systems that were noted as failing in a home inspection. If there’s something wrong, get it fixed before you buy!

Mistake #6: Not Getting A Home Warranty

That being said, you’re not going to ever find a home in absolute perfect condition, especially if it’s not a newly constructed house. Things wear out and break down. Make sure to ask for a home warranty during closing. Although it isn’t going to cover everything, it can provide major savings for new homeowners when something fails from normal wear and tear, and it will. Some home warranties cover for lack of maintenance, rust, corrosion or sediment in water heaters – all things that might not be found within a home inspection but can cause systems and appliances to fail. This is when you want a home warranty – you don’t have to shell out thousands of dollars to replace something when the seller didn’t maintain the system properly. It’s a nice fail-safe.

Mistake #7: Not Factoring In Resale Value

Finally, when you purchase a home, make sure to factor in resale value. Unless you are a millennial who has a lot more money than the rest and can afford to buy your dream home in the first go around, the chances are that you’ll be selling it sooner rather than later. Find something that can build equity (you can get new carpeting, hardwood floors, or granite countertops) and that will also appreciate over time (the neighborhood is up and coming, new shops and restaurants are popping up around it). Ensure that when you buy, the price will go up over time, so you can sell it for a higher profit than the amount you purchased.

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There you have it, seven mistakes you can now combat as you purchase a home for the first time. Use and share these tips to ensure your home-buying experience goes as smoothly as possible!

Featured photo credit: lenetstan/Shutterstock via shutterstock.com

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Last Updated on July 8, 2020

18 Benefits of Journaling That Will Change Your Life

18 Benefits of Journaling That Will Change Your Life

The act of writing in a journal often seems daunting or unnecessary to many people. Even authors who work on novels might shun the idea of daily diaries. What purpose does jotting down words on a regular basis do if not contributing to the next novel, play or song? I know from experience many benefits of journaling that I wish to share.

1. Understand Yourself Better

Though many people and even writers avoid keeping journals, I vow to do it more often. Not only do I desire to take up daily journaling but also I plan to do it with pen to paper.

Some of the benefits I’ve found from my more active days include finding myself in the sense of understanding what matters to me and what I want out of life. I’ve been incredibly fortunate to find a spouse who is my best friend and advocate in raising children. I attribute this and much more to what I learned about myself in keeping journals for years.

2. Keep Track of Small Changes

I’ll admit that I never got very far with my guitar lessons, but in writing in a journal, I have seen the ability to track small changes like those that come when you practice anything.

Those learning a musical instrument often fail to see the small improvements that come with regular practice. Writing won’t help you switch chords any faster, but it will help you to develop a better sense for language and grammar just by doing it.

3. Become Aware of What Matters

As you continue to write in a journal, following a stream-of-consciousness feel, you can look back on the topics that you chose to write about. Those issues and emotions that poured out of you will provide insight on to what matters most to you.

You may not even realize that you’re job is depressing you or that you want to spend more time with your kids until you look over your thoughts that you weren’t really thinking about.

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4. Boost Creativity

The idea that the brain and its neural activity across hemispheres encourages learning also shows up in increased creativity. Just like with learning an instrument, your increased activity will inspire your thoughts to connect and reconnect in different ways.

When I wrote in a journal, I often wrote poetry as well as just my thoughts as they came out. I started to hear poems more in my mind; so much so that I took to scrawling lines on napkins and finding metaphors in mundane activities.

You really are what you do, so writing helps grow more than being a writer. Writing boosts the way you communicate and structure language, which really is a creative process.

5. Represents Your Emotions in a Safe Environment

A journal is as private as it gets. You can lock it in a safe or tuck it under a pillow and no one will accidentally share it on social media or have an opportunity to “leave a comment.”

Write about your sorrow as much as your happiness and frustration and know that you don’t have to keep your emotions inside your body. You can put them on paper.

6. Process Life Experiences

When you take the time to look back over what you’ve written, be it a week or a year later, you will have the distance you need to more objectively interpret your raw feelings.

Everything from losing a job to losing a loved one can emerge in a new light for a fresh perspective. Figuring out how the benefits of journaling affect your perspective on life will create connection and increase creativity.

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7. Stress Relief

In combining the exercise inherent in fine motor coordination that comes from the act of writing with the emotional release of self expression, those who maintain a journal relieve stress.

Try it out. Go home and write about your day. Write about the traffic. Write about the coffee order the barista got wrong but you didn’t have time to change. See how you can physically purge some of that pent-up stress by putting it on paper.

8. Provide Direction

Though journaling is often conducted as an activity without much direction, it often provides direction.

One of the biggest benefits of journaling is that your chaotic thoughts merge to show a direction in which to head. Asking the right questions is the only way to achieve the best solutions, so look to your journal to find your way toward your next goal.

9. Solve Problems

Just as in practicing math problems, we all get better at finding hidden solutions through the act of processing.

Think of your next goal as X and solve your life problems by reading your journals as word problems. The benefit of journaling here is that you write, explore and process to recognize and then solve problems.

When life is too in-your-face, you have to step back to see reality. Living in the moment allows us to write in the moment and use that expression to solve problems.

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10. Find Relief From Fighting

Solving your problems only comes after time to process, recognize and strategize. Just as in the benefit of journaling where relief comes from the act of writing, relief from fighting comes when you decide to “sit this one out” and communicate one-way.

Fighting is only productive when the fighters care to communicate and find common ground. When the emotions are as high as the stress levels, writing will function as the best time out.

11. Find Meaning in Life

Journaling will show you why you are living, whether you are wallowing in things you wish to change or striving to make the changes. Your life will begin to take on new meaning and your own words will reveal the actions that got you where you are so that you can assess and pave a new path for your future.

12. Allow Yourself to Focus

Taking even a small amount of time out of every day will provide you with not only peace of mind but also increased focus. Taking a break to meditate in writing and journaling will sharpen your mental faculties.

13. Sharpen Your Spirituality

When we write, we allow all the energy and experiences to flow through us, which often provides further insight into our own spirituality. Even if your parents didn’t raise you to follow a specific religion, your thoughts will start to show you what you believe about the universe and your place in it.

14. Let the Past Go

I’ve mentioned a few examples where going back over your writing offers advice and direction, but the simply truth is that writing down our feelings can be the best way to let them go. We can choose to literally throw these pages away when they’re filled with negativity and hate.

15. Allow Freedom

Journaling is the perfect way to not only express yourself but to also experience the freedom of being who you are. Your books can stay private or you can publish them. Your freedom stems from your sense of self and your perception of your thoughts.

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16. Enhance Your Career

Again, the private act of pen-to-paper processing provides the benefits of journaling mentioned above, but you can also enhance your career when you take similar ideas and categorize, edit and publish them in an online blog.

Your thoughts will often be personal and express emotions, but another benefit of journaling is uncovering fresh ideas about your work.

17. Literally Explore Your Dreams

All the benefits I’ve mentioned explore ideas, thoughts and emotions, which is also what our dreams and nightmares do. Through writing down your dreams from the previous night, you can enhance your creativity as well as connect some of the metaphorical dots from the rest of your journal.

18. Catalog Your Life for Others

No one wants to think about dying, but we all die. Leaving a journal will act as a way to reconnect with family and friends left behind. The ideas you wish to keep personal while you process the life you’re living will serve to rekindle and inspire those who loved you through the process.

We consider our partners our life witnesses, but writing provides a tangible mark on the world.

Now that you’ve learned all the benefits of journaling, it’s time to start writing a journal:

Featured photo credit: Kelly Sikkema via unsplash.com

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