At 30, you need to buy what you need to start a family. Nearly 70% of buyers in this age group are married couples and 30% have children. Most lenders require at least a 10% down payment. Anything below 20% and you will normally be required to pay mortgage insurance.
Being able to put in at least 20% down payment not only saves you that unnecessary monthly expense, but it also significantly reduces the interest you'll pay over the course of a loan. The more you deposit, the more you save and the sooner you'll pay it. A good rule of thumb is to set aside what you can reasonably, but not so much, as to run out of cash or at risk in an emergency. Switching to a larger home is often a priority for homebuyers in their 30s.
But don't just think about how much space you'll need. Keep in mind that you may make those payments every month for the next 30 years. Accordingly, you should assess the reliability of your primary source of income. You should also consider your prospects for the future and the likelihood that your expenses will increase over time.
Stretching the budget isn't always a bad thing, says Gilbert. When you're young, you're likely to be right at the beginning of your earning potential. What may now seem like an effort to pay for a house, you'll probably feel much more comfortable in a year or two. Buying a home is a risky endeavor and being responsible is important, but don't be too risk-averse.
Stretching out to enter a home can now bear big fruit in the future. Look for a house. If possible, buying a home is preferable because in a condominium you have HOA rates and those are forever, says Skelton. Homes Tend to Accumulate Capital Faster Than Condos.
Instead of donating 100% of your monthly housing payment to the landlord, you “save a portion of each payment. This is my opinion and other people will disagree with me, but I think buying a home with significant Homeowners Association fees for the community pool, for a doorman, for lawn care is absolutely crazy. If you're remodeling or changing a home, it's best to focus on things that a) substantially increase resale value b) substantially improve your day-to-day quality of life. You should examine your income, savings (for down payment and closing costs), and recurring debt to figure out how much home you can afford to buy.
You can buy shares in real estate companies, you can buy REIT index funds, you can open an account with LendingClub and lend small amounts of money to people buying houses or doing renovations. At the same time, the house I finally bought six years later has not only been one of the best financial decisions I have ever made, but it has dramatically improved my life. The idea of living with your parents until you can buy a house seems absurdly immature to me (and what's worse, it's one of those things that sounds responsible). You'll find that many people discourage homeownership because maintaining a home is expensive and time-consuming.
But when it came time to buy the house, I had enough for the full down payment (or if I had a life-threatening emergency, I could have used it too). The housing market is hot enough now that selling a home even after a year or two can generate a net profit after real estate commissions and fees for legal advice and moving. However, if you can handle these additional home costs without additional credit card debt, you can afford to buy a home as long as you have saved enough money for your down payment. If you can't afford a single-family home in this market, consider buying a small condo or a more affordable home and ask your roommates to help you with the mortgage.