13 Rules Today’s New Home Buyers Can Learn From The Past

Many of today's new home buyers are Millennials – the generation born in the 80s and 90s – who are now getting married, starting families, and stepping into the real estate arena for the very first time. This is the same generation that grew up in a boom, followed by a bust and an insane decade of home-price escalation, wide scale under-financing, and subprime lending. Having witnessed the housing market's wild ups and downs, Millennials may be wondering what new rules apply in this evolving real estate realm. Luckily, the 'new rules' can be discovered in the same tried and true traditional rules of home buying that were overlooked in years past.

Here are thirteen rules for Millennials looking to buy (while avoiding a housing bubble burst):

  1. If you can't afford it, don't buy it.
  2. Don't jump into a home purchase blindly. Do your research, learn about the area, get advice from others, and study all the available data.
  3. No more creative financing: buy properties with traditional 30- or 15-year fixed loans – and know what your mortgage payment will be each month for the entire mortgage term.
  4. Always put 20% down.
  5. Whatever the bank says you can afford, subtract 20%, and you'll never be house poor.
  6. You're not just buying a house, you're buying a neighborhood.
  7. It's harder to get a mortgage because qualifications are more stringent these days. Keep great financial records, and be patient throughout the process.
  8. Don't expect the market to bail you out. That means no overpaying for a house you can't really afford in hopes of market appreciation making up the difference.
  9. Less is more. A smaller, practical, easy-to-maintain house is the new, big, rambling mansion.
  10.  Stay on top of your credit, and shoot for an excellent score (above 750).
  11. Plan to stay in your home at least 5 years. Think you'll need to sell before then? Keep renting until you know you can stay put for a while.
  12. Budget for all the ongoing costs of home ownership – not just the monthly mortgage payment. Be sure you have the funds for property taxes, insurance, maintenance, upkeep, and even an emergency repair fund.
  13. If you are questioning your job security and your ability to get a new job quickly in the event of a layoff – don't buy yet.

To a generation who saw risking everything and buying homes with zero down as the norm, these rules may seem new. But, as they say, everything that's old eventually becomes new again. In this new era, Millennials simply need to look back to get ahead and buy safely, sanely, and securely in the current housing market.

This article originally appeared on Trulia.com.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3080020, ~/Articles/ArticleHandler.aspx, 11/28/2014 7:28:06 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement