For most people, buying a house is the single biggest investment they’ll ever make. Unfortunately, for those still renting in their 30s and 40s, it can often feel as though you’ve missed your opportunity to grab a rung on the real estate ladder; while your friends are paying off their mortgages, it feels like you’re just treading water. But this couldn’t be further from the truth. In fact, waiting until you’re in your 40s to buy a home might just be the smartest decision you’ve made.
With priorities about your career, finances, and family figured out (or at least clearer than they were a decade or two earlier) your 40s are the ideal time to decide where you want to be in life—literally. Before you start beating yourself up for missing out, discover why waiting until now to buy property was the wisest decision you’ve ever made. And when you’re ready to start preparing that down payment, learn the 40 Easiest Ways to Save Money in Your 40s.
You Can Build Your Credit Score
Making the minimum payments on your credit balances in your 20s may have been your only option at the time, but it didn’t put you in a great position for getting a competitive mortgage interest rate. In fact, according to Credit Karma, individuals from 18 to 34 have an average credit score of under 630—not exactly mortgage material. Fortunately, with an extra decade or two under your belt, you can build those scores up, making it easier to secure a reasonable mortgage rate. Luckily, you can easily get those numbers into a healthy territory with the 7 Best Ways to Boost Your Credit Score.
You’ll Be Better at Budgeting
It’s hard to stick to a budget when you’re just barely scraping by. Luckily, most of us are earning a healthier salary by the time we’re in our 40s, making it a lot easier to budget with a mortgage, retirement savings, and even the occasional vacation in mind.
You’ll Have More Time to Save For a Deposit
Unless you’ve been living an ascetic existence since you earned your first paycheck, saving for a deposit on a home is no easy feat. However, if you’re buying in your 40s, you won’t have to spend your early years living like a monk to finance your dreams. Even if you start saving a modest amount in your 30s, you can have a healthy down payment ready to go a decade later. For easy ways to augment your income, learn the 40 Ways to Stretch Your Paycheck by 40 Percent.
You’re More Likely to Have a Partner to Split Expenses With
With a shaky economy and a graduate degree rapidly becoming the new bachelor’s, people are marrying later and later around the world. According to Pew, the median age for marrying is seven years later than it was 50 years ago; in fact, the age when the greatest percentage of American women are married is 48. This means that waiting until you’re in your 40s to buy a home significantly increases the likelihood that you’ll have someone to share those mortgage payments with.
Those Student Loans Might Just Be Paid Off
While it may seem like you’ll never pay off those student loans, by your 40s, that dream of being student debt–free is more likely to be a reality. Research suggests that up to 60 percent of individuals anticipate paying off those loans into their 40s, meaning that 40-plus is prime time for tackling a mortgage, once those loans are a thing of the past.
And You’re More Likely to Have a Graduate Degree
While just under 11 percent of Americans have graduate degrees by the time they reach 34, nearly 14 percent have an advanced degree a decade later, according to the U.S. Census. That number may still be small, but the ROI on a graduate degree is anything but. According to research conducted at Georgetown University, people with graduate degrees earn an average of $17,000 more than those with a bachelor’s degree or below. And when you’re trying to save for a down payment, that $17,000 can mean the difference between a starter home and one you’re eager to stay in forever.
You Have More Time to Educate Yourself on the Market
As anyone who weathered the subprime mortgage crisis can tell you, market volatility is as real as it is terrifying. Fortunately, people buying property in their 40s have likely ridden multiple ups and downs in the real estate market, learning a bit about the potential volatility of their investment along the way. Knowing that the huge house that needs major renovations might not earn out even your initial investment can help you make wiser decisions about what to buy. Once you’ve mastered the market’s ups and downs, educate yourself with The Best Tips For Buying Real Estate.
You Won’t Have to Ask Your Parents For a Loan
Your parents may have fed, clothed, and bathed you, but asking them to shell out money for your house is taking things a bit too far. Research suggests that a staggering number of people in their 20s and early 30s get help with a down payment from their parents. While this kind of financial assistance is nice, it’s even nicer to help give back to those who spent so many years caring for you, and when you’re in your 40s, footing your own bills—and maybe some for your parents—is more possible than ever.
You’re Less Likely to Wipe Out Your Savings
According to U.S. Census data, the median net worth of individuals under 35 is just $6,900. At age 44, that number jumps to $45,740, an amount that can easily set you up with a healthy down payment for a home without wiping out all of your savings. If you ask us, it seems pretty prudent to wait on buying that property, after all.
You Can Avoid Paying Private Mortgage Insurance
If you don’t have 20 percent of your total purchase price to put down when you’re buying a house, you’ll end up paying more in the long run. Purchasers who don’t shell out 20 percent generally have to put money toward private mortgage insurance each month. With rates up to 1.5 percent, this could mean that taking out a $300,000 loan could cost you an additional $375 in mortgage insurance costs every month.
You’ll Have Time to Learn About the Area
The best way to decide if you want to live somewhere is to actually live there. Learning about a community, from the kind of activities available in the area to the political leanings of your neighbors, before you want to buy is essential for your long-term happiness in a home. Luckily, if you buy in your 40s, you’ll have had plenty of time to suss out your city our town, helping you make an educated decision before you spend your savings on a down payment.
And Time to Test Out Services Like Schools
For people who want kids, having good public and private school options is essential. If you’re in your 40s, you’re far more likely to have a kid that’s already school-aged than you would be in your 20s or 30s. This means you can avoid buying a house in a neighborhood that seemed initially great but, in reality, contained less-than-stellar schools, and then feeling pressure to sell at a loss in favor of your kids’ education.
That Money May Earn You More Invested
While property is often a great investment, that down payment money will likely earn you more if it’s used to fund a diverse investment portfolio. Putting your money in investment accounts can help it grow steadily until you’re ready to withdraw the down payment in your 40s, at which point you’ll likely still have some money left over, too.
You’re More Likely to Have a High-Paying Job
According to data from the Bureau of Labor Statistics, workers from age 20 to 34 make an average of $33,916 per year, while from 34 to 54, that number jumps to $50,726. That means a lot more money for a down payment in your 40s and a lot less pain parting with your monthly mortgage payment.
Your Negotiating Skills Are Better Than They Once Were
Negotiating is an art that takes both time and patience to master. Fortunately, after years of salary negotiations at work, you’re far more likely to have the skills necessary to negotiate aggressively for the home of your dreams than you were at 22.
You Can Wait For Your Dream Home to Hit the Market
If you wait until you’re in your 40s to buy property, your odds of finding the perfect place increase significantly. With some perspective about housing and design trends, the more likely you are to know which au courant styles will look dated in a decade. Better yet, waiting until your 40s to buy means you’ll have plenty of time to check out the options on the market instead of impulsively snapping up the first home that’s merely good enough.
You May Be Able to Take on Less Debt
Using your 20s and 30s to boost your credit score—and then buying in your 40s—can save you a serious amount of money. Buying in your 40s gives you time to save up for a healthy down payment, lowering your overall debt, and potentially avoiding private mortgage insurance, while a higher credit score will slash your interest rate. When combined, these factors can save you tens of thousands of dollars—if not more—over the length of your mortgage.
You Can Better Assess Your Needs Versus Wants
At 20, it felt crazy to buy a house without a hot tub. At 30, buying anywhere outside a city seemed ludicrous. At 40, with a spouse, maybe a dog and two kids, or perhaps a job that has you traveling six months out of the year, you can better assess what you really need from a home, both in terms of space and amenities.
But You Can Afford Those Upgrades You Want, Too
However, when you’re in your 40s, with more money in the bank, those extras don’t seem so out of the question. That crown molding or new light fixture is unlikely to wipe out all your assets the way it might have in your 20s. And when you’re ready to make your whole home more elegant, pepper your existing design scheme with the 30 Most Stylish Home Upgrades.
You’re Less Likely to Get Divorced
Divorce can be a crushing blow, especially when there’s property involved. Luckily, the older you are when you buy property, the less likely you are to have an ugly division of assets to deal with. The good news? The divorce rate for people under 50 is approximately twice that of those over 50, meaning that if you’ve made it to your 40s with your partner, the odds are greater that you’ll hang onto both your family and your home. You just have to get through that one final decade.
You’ll Have a Career, Not Just a Job
By the time most of us hit our 40s, we’re either in a career-oriented job or at least have an idea of what we’d like to be doing in the long run. This can be a major asset when buying property, because it makes you far less likely to be willing to uproot yourself, potentially losing money on a home you just bought in the process.
You’ll Better Understand Your Spending
Budgeting is a useful tool, but really understanding your finances takes time. By your 40s, it’s a lot easier to admit that you really want to save, but you also really don’t want to give up those daily Starbucks runs, and find a healthy medium that will help you reach your savings goals without feeling deprived.
You Will Know Your Personal Taste Better
With social pressure and a glut of remodeling shows on TV, it’s often hard to decide what you actually like and what you’re being told is cool. However, despite our youth-obsessed culture, many people find themselves more confident in their 40s than they were in their 20s and 30s, and more able to say, “I don’t actually love mosaic tile” than they might have been even a few years earlier.
More Types of Property Will Be Available to You
As unfair as it may seem, buildings with co-op boards aren’t always eager to have a 20-something in their midst. Luckily, in your 40s, odds are your potential neighbors will be less worried about you throwing all-night parties, and more likely to approve your application. Better yet, getting into a co-op can save you a significant chunk of change in the long run, as you’ll be purchasing shares in a building rather than the home itself.
You’ll Know What Your Family Will Look Like
While the idea of having a family may have seemed foreign to you at 20, by your 40s, you’re likely to have some idea of the shape your family will take. When you know if kids, a spouse, or the bachelor life are in your future, it’s much easier to find a property that fits your lifestyle. Before you start planning for a family, make sure you haven’t encountered any of the 20 Surefire Signs Your Relationship Is Doomed.
You’ll Have Time to Learn Home Improvement Skills
People don’t learn home improvement skills overnight. However, by the time you’ve reached your 40s, you probably know how to swing a hammer, use a drill, and, if you’re a little advanced, you may even have a handle on hanging drywall. Taking the time necessary to learn these skills can save you the stress and money you would otherwise shell out for future renovations and repairs.
You’ll Have More Time to Travel
While owning a home and taking vacations aren’t mutually exclusive, a tight budget can make doing both feel impossible. If you’re working with limited cash, paying for a house- or pet-sitter, paying your mortgage, and paying for a vacation is likely to stretch your budget too thin. However, if you’re buying in your 40s, you can spend more time seeing the world on a shoestring budget when you’re younger and less time worrying about how your mortgage will get paid.
You Won’t Care As Much About Appearances
By the time you’re in your 40s, you’re not keeping up with the Joneses—in fact, you might not even know who they are anymore. With increased confidence comes a reduced desire to compete with your peers, meaning you can easily ride out the urge to buy a gaudy McMansion just because your coworker bought one.
You May Have a Contingency Plan in Place
In your 20s, you have hopes and dreams. In your 40s, you have plans. If you’re buying property in your 40s, you’ve likely had plenty of time to think about what will happen if the stock market goes belly-up. You’ve used that time to build a network of connections who can help you if your career doesn’t pan out, or you’ve at least saved enough money so that you won’t have to choose between paying your mortgage or buying groceries.
You Will Have a Better Sense of Your Priorities
When you’re in your 40s, you’ve had a decent amount of time to get to know yourself and what’s important to you. Whether you just need a place to crash on the odd night you’re in town, or want a huge home that you can use to host your whole family in the future, it’s a lot easier to find a property that suits your needs when you have some perspective on life.
You Can Actually Tackle a Fixer-Upper
While it may seem attractive to completely remodel a home, by the time you’re in your 40s, it will be lot easier to tell just how doable that might be. When you’re working 60-hour weeks just to pay rent in your 20s and 30s, learning how to tile a bathroom is unlikely to top your off-the-clock to-do list. Luckily, you might just find the time once you’ve taken a decade or two to get your work-life balance in check.
You’ll Be a Better Neighbor
Making friends with your neighbors can provide you with a sense of community and may even make your home safer in the long run. Luckily, you’re a whole lot more likely to ingratiate yourself with your neighbors in your 40s, when they’re unlikely to see you as a frat party waiting to happen.
You’ll Have Plenty to Furnish Your Place With
Buying furniture is a costly endeavor, especially when you have a whole home to furnish. The good news? By the time you’re in your 40s, odds are you’ve collected at least a few nice pieces of furniture that can help you start setting the tone for your new home.
Or You’ll Have the Money to Switch Things Up
Even if your worldly belongings are little more than a futon and a flat screen by the time you buy your home, you’re likely to have some cushion to help you out. 40-somethings earn more on average than those younger than them, meaning a sofa or set of pots and pans probably won’t wipe out your savings. Don’t know where to start? Check out the 40 Items Every Man Over 40 Should Have in His Home.
You’ll Have the Confidence to Do Things Exactly How You Want Them
While you might feel a tinge of embarrassment buying the modest home you can afford when you’re a bit younger, in your 40s, you’re unlikely to care as much about your peers’ opinion of your place. This can also give you a sense of freedom when it comes to decorating, whether your taste is mid-century modern or you can’t get enough of dramatic Victorian style.
Waiting May Mean a Price Drop
Waiting out a real estate bubble can help save you huge amounts of money. If you’re interested in buying in a hot market and don’t mind waiting until you’re in your 40s for things to cool down, the price of your dream home is apt to dip.
You Can Build a Community Before You Buy
Instead of simply buying a home and hoping you like your neighbors, buying in your 40s gives you plenty of time to build meaningful ties to your community. If you have the time to rent, volunteer, or just spend time in an area before buying a place, by the time you actually purchase property, it will already feel like home. Just make sure you know The Single Best Way to Make New Friends.
You’ll Know Better if You Want to Rent or Own
Buying isn’t for everyone. Whether you want to move every few years or just don’t see yourself ever saving for a down payment, renting may be the better choice in the long run. Luckily, by the time you’re in your 40s, you’ll probably know whether buying or renting will be a smarter move down the line.
You Might Have Inherited Wealth if You Wait
It’s a bit of a downer, sure, but, the older you get, the more likely it is that a parent, grandparent, or spouse will have left you money. According to data from HSBC, the average American inheritance is about $177,000—that’s more than enough for a down payment on a modest home, if you’re willing to wait for it.
You Can Choose a Forever Home
While at 22, the future seems so vast it’s hard to imagine doing anything forever, by the time you’re 45, settling in for 30 years doesn’t seem implausible. Waiting to buy property in your 40s can help you make an investment that lasts a lifetime and protect you against huge price surges in the rental market when you’re ready to retire. But before you even start looking at houses, though, make sure you have committed to memory the 15 Things Your Real Estate Agent Won’t Tell You.
To discover more amazing secrets about living your best life, click here to sign up for our FREE daily newsletter!