Millennials, Mortgages & Homeownership
It is no surprise that millennials, generation aged 18-34, make up more than 40% of homebuyers today. Follow these simple steps to join your peers on the path to home ownership.
Don’t Wait Forever
If you find yourself waiting for the perfect house, at a great price, and the lowest rate, you may never become a homeowner. It is no secret that interest rates have risen over the last quarter, but by historical standards, rates are still extremely low. Appreciation of home values went up 6.8% nationally in 2016, and are predicted to increase another 4% in 2017. Home sales are also up 15%. With interest rates and housing prices on the move, waiting could cost you more than you think.
Studies have shown, you’re probably paying about 20% more in rent than you would for a mortgage on the same property. This is great news for your landlord, but not for you! When you own your own home, not only is it yours, so you can DIY it to your hearts desire, but you are contributing to your investment, not your landlord’s.
Don’t Assume the Answer is No
You know what they say when you assume, “Don’t make a…” Anyway, you get the point. Many potential buyers just assume they will not qualify, so they don’t even try. Student loans and little savings will not automatically disqualify you from obtaining a mortgage. In most cases, only 1% of your total student debt must be counted toward your debt-to-income ratio, and many no-or-low-downpayment programs are available today.
One of the biggest mistakes potential homebuyers make is looking at homes before speaking with a loan officer. It is important to know now only if you qualify for a mortgage, but how much, and if the payments are comfortable for your financial situation. You would not want to fall in love with a home outside of your price range, or waste the sellers’ time.
Hire a Buyer’s Agent
After you have been pre-qualified for a mortgage, find a buyer’s agent you can trust. Searching for a home on your own will not save you any money—in fact it could do just the opposite! Realtors play a vital role in the real estate transaction, including showing the property, writing the offer, handing negotiations, obtaining concessions (such as closing costs), and help coordinate all of the involved parties.
Do Not Give Up
Don’t just give up if you don’t qualify today! Ask your loan officer what barriers are preventing you from being qualified, and how to improve. Sometimes, all it takes is a small downpayment gift from a family member. If poor credit is the problem, inquire about what problems may be negatively affecting your score, and work to resolve and remove them.
According to a recent survey conducted by mortgage giant Ellie Mae, 90% of millennials want to own a home, just don’t believe they can yet. 45% of those polled said lack of downpayment was their barrier, and only 30% said inability to qualify was the issue. Whatever the problem may be, do not give up. Talk to your loan officer who will be happy to advise you!
Have a specific scenario you’d like to run past us? Give us a call to speak with one of our licensed loan officers. We would love to recommend the best loan program for you and your situation.
Get More Information
To apply for a Mortgage or Refinance call Riverbank Finance today at 1-800-555-2098.