Would you recommend someone who is in their early 20's to be a house owner?

Question

I have been thinking about buying a house...I am still in college and do live on campus during my term. Some people have been telling me I am too young but I have an understanding of what goes into owning a house since my mother owns one. WHat is your opinion?

Answer 1

Good luck to you dear heart :

I think I would choose to live on campus because owning a house is a lot of responsibilities and personally I did own a house and had a lot of problems. You are young and of course perhaps your mother owns one, but she probably could tell you better than anyone on line because she knows you and she knows what is involved and the area where you are planning to buy it. I would agree that you are young to be getting that kind of responsibilities while still in college. If you want to work hard, and succeed in college both at the same time, then it's up to you to use your logic and common sense. Then you'll find out what it is all about and perhaps decide to wait for a while after graduation from college.
I do admire your courage in this project of yours.

Answer 2

I think that if you have the money to pay it off, you should definitely go for it. Dept is for suckers. You end up paying more than twice (sometimes) what it's worth, most of which goes in the pockets of the mortgage companies. You're working your life away for fifteen years, and if you had just lived frugally for four or five years, you could have saved the money up as a single young man.

Here's the thing. You want credit, right? Okay, save your money over the next four or five years. Take out a loan on something that is reasonably affordable and cost less than what you have in the bank. That way you'll be sure to get the loan. Then, immediately pay it off. Live in it for a few years, maybe make a few improvements, then have it appraised and sell it for a profit. Repeat the process, buy more than one if you can. Rent the other out while you're living in the second home. In no time, the second house will have paid for itself (granted you don't rent it to people who destroy it from the inside out). When you've replenished your funds, repeat the process. Now you have two houses rented out, and one that you live in. One of the houses is paying for itself, and the other is giving you a steady profit.

Real estate never devalues because they can't produce more land. If you got tired of renting out your properties, you could always sell them. That'd make a heck of a retirement fund, don't you think?

Answer 3

Plenty of people will pitch that old line at you, "You're throwing your money away!" by renting. But what you're really paying for is:
* The ability to end your lease and move with ~30 days notice,
* Somebody else to worry about broken appliances,
* Fewer bills to pay, as the landlord often takes care of heat, electricity, garbage, property taxes, water, and possibly cable. (You're probably still paying for it, but it's all in one bill.)

Whether to buy a house depends more on your financial situation than your age. Lenders will typically allow you to borrow up to 28% of gross income, or 41% of gross income minus your other monthly debt payments, whichever is more. This generally works out to a mortgage amount of 4x your annual income. But remember, these guidelines are not made for you, but for them. This is basically all the house they think you could afford if you cut all your other costs and live on Ramen noodles. They want you just in debt just deep enough that you can barely afford your payments, but not so deep that you default. Sure, the mortgage payment is usually less than rent, but don't underestimate the additional costs of taxes, property insurance, remodeling, furniture, and new appliances.

A similar trap that people fall into is overreaching for your first house. Go for a smaller house, or a condo, while you're still young (and single, I'm guessing, since you keep saying "I".) That way, you can build equity, which will make your next house much more affordable.

I wouldn't recommend borrowing more than 2-3x your annual income, so that you can pay down any other debts, build up a rainy-day fund, and have some money to enjoy life with. I'd recommend drawing up a hypothetical budget to determine what your income and expenses would be, and see what sort of lifestyle that would mean for you.

Also, steer clear of interest-only or reverse-amortizing mortgages. You'll get a low payment at first, but it can quickly double or triple when the rate resets.

Answer 4

You are better off buying a house (which is an asset) than renting (which is a liability). If you don't buy a house now, you may not be able to buy one later- Times change- opportunities change.

Mortgage interest is tax deductible- Rent is not.

If you buy a house now, in 5 years, it could appreciate up to 40% (or more in some communities).

If you rent, your monthly payment will only increase.

Wouldn't you be glad if you had purchased a house 5 years ago? You'd be sitting on a ton of equity!

Buy the house.

Answer 5

If you have a steady income and a good credit I would say go for it. However, wait until the prices go down so you can do better investment after all it will be a day that the price will jump again and you will gain the equity on your house.
By the time you are in your 30's you will be able to buy another one or sell the one you kept for 10 years and buy a bigger place.
The answer is definitely a wise move if you can afford it.

Answer 6

A 20 year old owning his own home is a Mothers dream !
If you can afford a mortgage payment ( which in many cases is less than renting ), and the upkeep on the house GO FOR IT !!!
If you can keep up with all those things, and still keep a decent GPA, you are definitely on the right road !!!
Congratulations and good luck !!!

Answer 7

Only buy a home when you have a steady income from your job. You don't want to loose your house because you couldn't get a job right out of college. Stability looks great on a mortgage application, unless you have saved up for the house, then by all means, I'd purchase!

Answer 8

If you have good credit, are good or willing to learn to fix up, mature, and can pay for it or make the payments, then by all means, don't let anything discourage you. It's a lot of responsibility, but there are few better educations for real estate than actually going through the buying and financing and repair of a house.

You can rent out the other half. Be careful, do your homework, including checking references AND credit on your renters.

Answer 9

You should wait, the market and the economy is slowing now and with prices still high. I would wait 6 months ot a year to purchase a house. Real Estate agents are having a tough time and the market is becoming flooded with unsold properties.

That nice house you see now for $150K will be $110K in 6 months, just wait.

Answer 10

Hell yes. The market is still great. If you can afford it, it will be one of the best investments in your life. I bought my first home 3 years ago when I was 26. I wish I could have sooner. I'm going to buy another as a rental soon. Take advantage of these low interest rates too. Good for you, go for it!