Many young people will probably opt to rent for a while before jumping into home ownership. And before they buy their first place, there are number of things they should probably consider.
According to the American Bankers Association, one of the first concerns should be whether a person can even afford the payments associated with owning a home. To do so, a home budget may be in order, which can show how much personal finance flexibility a buyer has.
"Keeping mortgage payments under 30 percent of your monthly income is a good rule of thumb," the ABA said. "If you can’t keep mortgage payments below that, you may be better off renting for awhile."
Along with mortgage payments, owners will be responsible for other monthly expenses, including property taxes and home insurance. Their credit score will also dictate the type of interest rates they will be offered.
If it turns out that a younger buyer isn’t ready to take the plunge into owning a home, there are some personal finance steps they can take to improve their future prospects. Saving money is one, as funds will be needed on a down payment. Furthermore, staying on top of bills will help keep credit scores high.