4 Smart Tips for Millennial Homebuyers
Remember when people used to think Millennials would never buy homes? According a report done by the National Association of REALTORS®, Millennial homebuyers have passed up baby boomers and Gen Xers for the fifth year in a row! So if you’re a millennial looking to buy a house, here are four smart tips you can follow to make that homeownership dream come true.
Pay Off Debt
Student loans are the biggest challenge facing millennial homebuyers. In fact, over 44.2 million Americans are paying off a national student loan debt of $1.48 trillion—and, in 2016 alone, the average student loan debt was $37,172 per graduate. Millennials also have consumer debt which postpones homeownership. NAR reports that, second to student loans, the two expenses that delayed saving for a down payment were credit card debt (32%) and car loans (32%). Paying off any debt you currently have will make it easier to save up for the down payment!
Save Up for the Down Payment
If you’re struggling to save for the down payment, you’re not alone. One fourth of millennial home buyers couldn’t do it alone, accepting a money gift from a friend or relative. Additionally, some millennials need more than seven years to save for a down payment, according to a study by Builders Online. Saving up for a down payment can be tough, especially when you’re dealing with so many other expenses. Fortunately, there are loan options that either offer low down payment options or don’t require a down payment at all! Conventional mortgage options with down payment options as low as 3% are available to qualifying borrowers. You can even skip the conventional loan and go for a Federal Housing Administration or FHA loan with only 3.5% down. If you choose to buy in a more rural area, you might be eligible for a USDA loan, which requires no down payment. And if you have served in the military, you have a 0% down payment option with a VA loan!
Stand Out as a Buyer
In the past few years, the housing market has had a shortage of sellers, which has not only raised the prices of homes, but also has caused competition among buyers. This is known as a sellers’ market, and you might find yourself in bidding wars with buyers who have a bigger budget and more home-buying experience. Getting preapproved for a mortgage before you make an offer and working with the seller on their preferred timeline will help you compete in a tough market!
Familiarize Yourself with the Process
One of the best things you can do as a first-time homebuyer is familiarize yourself with the buying process. Get started by working with experts who know what they’re doing. A mortgage loan officer will help you explore your mortgage options and prep your documents to apply for a home loan. A realtor will ask all the right questions and help you find the right home in your area for a great deal.
Ready to begin your home buying journey? Contact one of our expert loan officers today to get started!
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