| We encourage our kids to plan for their future, | | | | at least a little something to it with every |
| but we seldom include buying a first home sooner | | | | paycheck. Yet, he is rarely counseled quit renting |
| than average as a path to building that future. Let | | | | that apartment for $750 a month and buy a |
| them know buying a home is easier than they | | | | $75,000 house. Where will he come up with the |
| think. | | | | money to do it? There are multiple options for |
| Most of the people who read this column are not | | | | first time buyers that allow for 100% financing. |
| first time homebuyers. The fact of the matter is | | | | Get the seller to kick in closing costs (up to 6% |
| many of you that are first time homebuyers and | | | | of sales price with some products), and one can |
| reading this article are relatively mature individuals | | | | close on a loan and bring no funds to the table. If |
| who are fighting off your commitment fears of | | | | your home value appreciates 4% in the next |
| being tied to a mortgage. But there is a huge | | | | year, that’s a nice return on a no cash |
| segment of the population that could buy their | | | | investment. |
| first home, yet it doesn’t occur to them | | | | For some time, I’ve considered writing |
| to do so. Who are these people? Well, it’s | | | | this series for first time buyers to let them know |
| your 24 year old son or daughter, new to the | | | | buying a home is easier than they think. But, the |
| work force, and is throwing away money on rent | | | | more I thought about it, the more I realized the |
| somewhere. Encouraging your children to buy a | | | | advice I would offer would most likely not reach |
| home when they are young is some of the | | | | my target audience. So parents, it is up to you to |
| soundest financial advice you can give them. | | | | supply your kids with this last little bit of advice |
| Equity in a home is an easy way to grow | | | | and help to set them free to further establish |
| one’s portfolio with very little investment. | | | | their independence in this world. Clip this article out |
| But the fact of the matter is it doesn’t | | | | and tape it to their iPOD or the steering wheel of |
| occur to most of us to encourage the younger | | | | their car – someplace it will get noticed. |
| generation to buy early in their lives. And trust | | | | I think for most of us who have been through |
| me, it rarely occurs to our kids themselves to | | | | the experience, our first home buy was a very |
| consider buying a home in the early twenties. | | | | daunting experience. There are so many choices |
| They are more concerned with buying a new Halo | | | | and unknowns - it can be overwhelming. In this |
| 3 for their Xbox. | | | | series, I will try to break it down the process into |
| Why do so many people miss the boat on this | | | | small logical steps and make it easier understand |
| opportunity? It could be they plan to be in the | | | | the steps involved in financing your first home. |
| area for only a short time because they will job | | | | Where do you start? That is perhaps the easiest |
| hop to advance their career, thus viewing a | | | | part. Our newly established worker should first |
| mortgage as “too permanent.” I | | | | make a list of all his or her debt obligations such |
| counter to simply sell the house when you move. | | | | as student loans (unless deferred), car payments, |
| Or maybe they expect their income to double or | | | | credit card debt, etc. Hopefully at this age, this will |
| triple over the next three years. I say buy a | | | | be a small list. Then add what you think amount |
| home now, then upgrade to a new home; sell or | | | | you could afford for a mortgage. Take that |
| rent the old house. Investing in real estate is a | | | | amount and divide it by your gross monthly |
| proven, safe and solid return on investment. And | | | | income. If you come in at 43% or less, |
| with the right combination of credit history (or a | | | | you’re in business. If you have something |
| history of paying utilities, cable and your cell phone | | | | in your savings or checking - great. If not, |
| on time) and no money down, you or someone | | | | don’t let it deter you. You have options. |
| you care about can start investing in the future. | | | | Contact a mortgage specialist to drill out the |
| When Junior starts his new job at the company | | | | details and find a good realtor who knows your |
| and 401(K) is available, he’s been informed | | | | market for housing you can afford. What next? |
| by his folks, boss or peers to enroll and contribute | | | | Get ready to tell your landlord “Adios!. |