When is the Best Age to Buy Your First Home?

While there really isn’t a “best age” to buy your first home, according to a study by Bankrate.com, everyone except the oldest Americans said the best time to buy your first home is at the age of 28. As a point of reference, the median age for first-time homebuyers in the country is 32, reports the National Association of Realtors.

If you can swing it, there are lots of benefits to buying a home at a younger age. If you purchase it at 28, taking out a 30-year mortgage, assuming you don’t refinance, you’ll be free of housing debt long before most workers even retire. And, of course, it would be nice to celebrate your 40th birthday knowing that you’ve paid a good chunk of that mortgage off and that your homesale value is a lot more than what you still owe on that home loan. Plus, you’ll be able to take advantage of all those tax breaks available to homeowners.

But no matter what your age, there are a few things you should think about to determine if you’re ready to buy your first home.

You may be in the position to purchase, if you:

• Can comfortably afford the mortgage payment for a home in your desired location
• Have a steady income
• Have enough money saved for the down payment, closing costs and other fees
• Have an emergency fund with at least three months’ living expenses
• Have no, or little, other significant debt
• Have a good credit score (ideally, 725 or higher)
• Plan to stay in the house you buy for at least five years to recoup initial expenses

If you’re disappointed after asking yourself those questions, don’t be too hard on yourself. Many people who are still in their twenties aren’t ready to buy their first home, with little savings, lots of student debt and being a long way from reaching peak earning potential. Of course, that doesn’t mean buying a home before you turn 30 isn’t possible, if you’re willing to sacrifice.

Here are a few ideas you may be able to use to make it happen:

Get a second job. If you’re 22 now, perhaps just out of college and can land a second job on top of your regular one, earning just $500 extra a month for the next six years, you’d have $36,000 you can use for a down payment by the time you’re 28.

Live with your parents. If the average rent on an apartment in your area is $1250 a month, plus another $250 for utilities, that’s $1500 you could be saving every month if you can live with your parents for free. In just two years, you’d have $36,000.

Cut your expenses. Keeping your expenses as low as you can help you save more of what you’re bringing home. Think about things like cable television, dining out, gym memberships and the like. The more you can cut, the closer you’ll be to being in a position that allows you to buy that first home.

FHA and VA home loans. Loans through the FHA typically require smaller down payments that may make it possible for you to buy your first home sooner than you think. Or, if you’ve just returned from military service, a VA home loan will make it much easier for you to buy with many of its loans requiring no down payment at all.

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