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How to Own 2 Homes by the Age of 21
Stepping into the bank in search of a mortgage is a daunting thing to many young adults. It represents commitment, independence, and perhaps most frightening, becoming an adult. At the same time, it is extremely rewarding to step into your home and say "This is mine!". But with the current price of housing, how can young people possibly get into the market? I will share a few tips that allowed me to purchase two homes by the age of twenty one.
The first step is to establish a good credit rating. Being young, you already have one strike against you. If you have no credit or credit problems, your chances are slim to none. When you turn eighteen, get a credit card. You should not think of this card as free money, but as an extension of your bank card. Make minor purchases with the card every month and ALWAYS PAY THE CARD OFF IN FULL! If you are unable to control yourself, set it up so that money is automatically taken from your bank account and the card is fully paid off each month.
Avoid debt. Put off buying that fancy car for a few years. Put the clothes and gizmos on hold for a while. I finished college debt free, and although it was difficult, it is possible. When you go into the bank for a mortgage, you want to have no liabilities (aka payments).
Get a job that pays well. There is no two ways around it, you need to make an income that allows the bank to feel secure in lending to you. Luckily, I finished college and fell into a great opportunity which allowed me to do this. Before you go to the bank, you should have been working at this job for 6 months to a year. You should get a letter acknowledging your length of employment, salary, and opportunity for continued employment from your employer.
Go to the bank. Have your financials in order and make an appointment. When dealing with banks, be positive and confident. Remember, they are actually working for your business, not the other way around. Lay out all your facts and see what happens! If you are getting rejected, try employing the services of a mortgage broker. They will shop your mortgage around to many different lenders. It saves you the trouble of meeting with each bank individually, plus they have access to many more lenders than you. The best part of employing a mortgage broker is that it's free! The banks are the ones who pay them!
This is how I got my first mortgage. I purchased a home with it. Only a few months later, an opportunity presented itself to purchase another home and I jumped on it. I had my home appraised and the value had already increased forty thousand dollars in that time. I found two investors who helped me with the down payment of twenty five percent. I then went to the bank with a one year lease from a renter I had found, a cosigner, and my home appraisal and voila! I am now the owner of two homes at the age of twenty one!
Thus far these investments have been good to me, one more than doubling in value, the other increased by fifty thousand dollars. Follow these steps and hopefully you will never pay rent again!
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