Jim Valentine: Too young to buy a home?

Home ownership is a wonderful thing and the opportunity to own your own home in the United States is readily available to everybody. The perfect time to buy is now, regardless of what your situation is. If you are a first time buyer, get in the market and grow with it. If you are young, plan your future. You aren’t too young to buy a home. Lisa bought her first home at the age of 18.

If you are young you probably have a lot of things going on in your life and mind. If you have shelter, you are likely not focused on housing and real estate. You might want to take some time and explore home ownership. Talk to an agent and ask a lot of questions. What can you afford? What does that buy you? What is the availability of that type of property? What if you want something nicer, should you wait or buy now?

The first time home buyer isn’t going to buy her “dream,” or “forever” home. That comes later. Most people work their way up in the market starting with something modest, or small, and then moving up as they can afford and/or need something more. It is kind of like buying your first new car when you move up from the “beater” status of vehicle. You don’t buy the luxury car for your first car, but over time you work your way up to it, if that is something that you want. The same applies to houses. You buy what you can initially afford and work your way up as your wants and needs change.

Your lifestyle will change over time as you can afford more, need more land, more bedrooms, better location, or whatever your circumstantial changes dictate. If you buy something modest to start you can sell it when you move up, or keep it for your real estate portfolio as a rental, or, ultimately, as a home for a child or parent. It is an asset that will serve you well as its value will move with the market, and you will be in the market.

If you are paying $1,200 monthly for rent you can borrow about $223,500 with an FHA loan. FHA requires 3.5 percent down, or $8,102. If you are a veteran you can get a VA loan with $0 down, zero. Rents today are such that many tenants can actually buy a home for the same, or nominally more than, what they are paying in rent. Afraid of your credit, or lack of a down? Talk to a good local lender. You might be surprised at the options that are available to you. If nothing else, you will get facts with which you can make a plan for your future.

There are many benefits to home ownership. When you own you make your payments with after-tax dollars, not before tax. You can paint it your favorite colors, upgrade it, add to it, etc. As the market goes up your value goes up creating equity. If you were renting when the value goes up the rent would be increased on you. That isn’t the case when you own, each payment gives you more of an equity position. You are buying your house, not helping somebody else buy their investment property which is what you are doing as a tenant. And there is the pride of ownership factor, you own your home.

Our advice: Many young people focus on getting out of their parents’ home, only thinking of getting a place to rent. In reality, while living with the folks you can save up a down payment and move in to your own house when you move out. Showing responsibility like that may get the folks to give you a hand in the process. They must be very careful if they do because you may get married, get judgments, divorced, etc., that could jeopardize the investment. Make a business arrangement that protects them and you from future hazards of life. Want to buy a house? Get the facts, make a plan and work it. You will own a home before you know it.

When it comes to choosing professionals to assist you with your real estate needs ... Experience is Priceless! Jim Valentine, CDPE, SFR, RE/MAX Realty Affiliates, 775-781-3704, dpwtigers@hotmail.com, www.carsonvalleyland.com.