Our last #Millennitalk Twitter chat with Fidelity Investments brought inspiration, clarity, and structure for those interested in learning more about the emotional and financial decision of buying your first home.
If you missed our chat…not to fear! See the Highlights below.
CHECK IT OUT, Helpful Tool:
With Fidelity Investments’ new Rent vs Buy calculator, explore which option may make more financial sense. And for those who are ready to buy a house, check out this homebuyer’s checklist to help get your finances in order.
Q1. Let’s start with the basics what is the first step we can take when deciding if we should “Buy or Rent.” #Millennialtalk
Q1A1: 1st ask yourself how long you plan to live there? If answer is < 5 years, then buying generally doesn’t make sense. #Millennialtalk @JeanChatzky
Q1A1. Here are 5 questions to ask yourself to weigh the long-term effect of your choice go.fidelity.com/pxhp MillennialTalk @Fidelity
Q2. If we are currently in debt is buying a home something one can consider? #Millennialtalk
Q2A1: Absolutely. If you’ve shown that you’re a responsible borrower by paying on time w/student loans/CCs, it could help. #Millennialtalk @JeanChatzky
Q3. How can having a good or bad credit score have an impact on the ability to buy a home? #Millennialtalk
Q3A1: Your credit score is very important. You need a credit score of 720 to qualify for the best rate on a mortgage. #Millennialtalk @JeanChatzky
Q4. How can we find out if we are throwing away money paying rent? #Millennialtalk
Q4A1: It’s complicated. If you’re renting to save money, you’re only capitalizing on it if you put savings AWAY for tomorrow #Millennialtalk @JeanChatzky
A4. Rent vs. buy is a hot debate, & a personal choice; http://go.fidelity.com/pebz addresses important considerations – #MillennialTalk @Fidelity
Q5. How can we create a savings plan to help us prepare for upfront costs associated with buying a home? #Millennialtalk (brokers’ fees, appraisal fees, title insurance, mortgage)
Q5A1: Like u save for any goal. Add up what costs are likely to be, divide by no. of months until u want to make purchase. #Millennialtalk @JeanChatzky
Q6. Can you buy a house with less than 20% down? #Millennialtalk
Q6A1: You can, but expect fees and you’ll need to buy mortgage insurance, either private mortgage insurance (PMI) or FHA. #Millennialtalk @JeanChatzky
Q7. Are there tools you can share to help us determine the impact that buying or renting may have on our long-term finances. #Millennialtalk
Q7A1: Yes! I have a Rent vs. Buy calculator on my site: https://www.jeanchatzky.com/tools/rent-vs-buy-calculator/ #MillennialTalk @JeanChatzky
Q8. How important is it to think LONG term? The cost of home ownership can vary if you plan on living in that home long term correct? #Millennialtalk
Q8A1: Yes it can. Harvard study finds you need to plan on spending 1-2% of the value of your place on maintenance/yr. #Millennialtalk @JeanChatzky
Q9. Is there a certain % of our income that we should a lot to home ownership? #Millennialtalk
Q9A1: I say confine your spending on housing to no more than 35% of budget. This includes taxes, insurance, maintenance. #Millennialtalk @JeanChatzky
Q9A2 For example: According to a Fidelity article: A good rule of thumb is to limit your housing costs—mortgage payments and interest, real estate taxes, and homeowner’s insurance—to 30% of your income. https://www.fidelity.com/mymoney/rent-vs-buy #MillennialTalk @JeanChatzky
Thank you Fidelity, and specifically to Kristen Robinson, Jean Chatzky, Brittney Castro for joining this week’s Twitter Chat and offering so many insights to those debating whether buying a home is the right financial decision. To explore more personal finance topics related to investing, spending, borrowing and preparing, visit Fidelity’s MyMoney.