Millennials: Our Guide to Homeownership 101

To rent, or to buy… That is the eternal question for an increasing number of young professionals. Owning property can not only be another step into adulthood for millenials, it can also be profitable if it’s done correctly. By purchasing a house, you can live in it till you pay the mortgage then get Home Remodeling In Fairfax VA and sell it on for more money than you bought it for. A lot of people make a living by doing this so it’s easier than most people think. However, the first purchase is always the hardest.

With just a quick Google search, you’ll see countless articles about millennials waiting longer to get married and have kids, increasing levels of student debt, rising living costs, tightening credit standards, etc.

All of these factors are valid. Student debt, for example, has reached an all-time high and can become prohibitive for first-time homebuyers. However, as you’ll see in part #2, there are some tactics/tools cash-strapped millennials can use to make the buying process easier.

In the following two sections, our goal is to set the record straight on millennial homeownership and offer up a few tips to help young buyers work towards their first home. We know how important it can be when you decide to buy your own home, and even more so when it is your first one. That is why we want to make the process as easy as possible for you. Alongside getting some extra help from somewhere similar to McGraw Realtors, (www.mcgrawrealtors.com) in searching for your perfect home, these tips should also provide you with everything you need to know to help you purchase your first home.

Part #1: The Top Reasons Millennials Purchase Homes

1) Control Over Living Space – Whether you’re interested in remodeling the kitchen, owning a pet, or just want to paint the walls a different color, renting doesn’t afford nearly the same degree of control over your space as owning. Often times, landlords have strict rules against changing the property and/or having furry friends.

2) Sense of Privacy & Security – When you own a home, it’s entirely your property. You aren’t “borrowing” it from someone else, and you can secure it however you want.

3) Nicer Home – Perhaps you want to live in a newer home? You’ve seen luxury homes online and want to learn More about cayena as you aspire to live in one yourself, or one like them. Or maybe you’re looking to renovate an older house to make it your own? What about a yard for BBQs and kids down the road?

As a homeowner, you have the flexibility to choose nicer options and make improvements.

4) Community Engagement – Everything changes once you purchase a home. You are now invested in the neighborhood and the community as a whole. You have a desire to improve your surroundings so the value of your home remains high.

5) Flexibility in Future Decisions – When uncertain times arise, homeowners are able to borrow against the equity in their home. Having this option available can help young buyers feel more secure in their purchase.

Part #2: How to Work Towards Homeownership

Given the factors mentioned at the beginning (higher cost of living, credit standards, student debt, etc.), how can millennials best navigate the buying process?

1) Student Debt – According to the National Association of Realtors, 44% of millennial homebuyers were still paying off student loans at the time of purchasing their first home. This is almost half!

Often times, young professionals have a misunderstanding about a) the downpayment percentage and b) the debt-to-income ratio required to qualify for a mortgage. In many cases, these figures are far more attainable than people expect. Count on a team of experienced real estate professionals like Spectrum to help you chart a savings plan and take advantage of more favorable financing options.

For more information, check out this Mortgage Reports article: https://themortgagereports.com/19172/first-time-home-buyers-guide-buying-with-student-loans-debt-gina-pogol

2) Downpayment – It used to be potential homeowners needed to put down a minimum of 20% to get a loan. Thanks to a variety of new programs, buyers can put down as little as 3% in some cases. In fact, 61% of millennial homebuyers in 2016 put down less than 10% up-front for their purchase.

Graphs and a more detailed explanation can be found here: https://www.mykcm.com/scripts/apg/gapg.php?g=millennial&contactId=99166

3) Credit Score – Again, there tends to be a misunderstanding with regard to the credit score required for a mortgage (a credit score is the number between 300-850 depicting a person’s creditworthiness). The help offered at repair.credit could be invaluable in helping you secure the mortgage you require to purchase your dream home.

Many people think this number has to be in excess of 780 to qualify for a loan, however, that is just not true in many cases. Come to find out, the average FICO score for millennial homebuyers is just 721!

Click here to run your credit score for free: https://www.creditkarma.com/

Are you a millennial buyer looking to learn more? Let’s talk! Schedule a quick phone call with one of our team members at spectrumrg.com/consult or drop us a line at sales@spectrumrg.com!