There’s been news around the world stating that it’s too hard for the Millennials to purchase a home because of debt, not having enough credit, and/or not being able to come up with the heft down payment it takes to get your foot in the door! Many of these young buyers are being squeezed out of the market by those who have what it takes to impress the banks and the sellers. Even though many people state that the Millennials enjoy renting instead of buying due to constantly being on the go and moving around often, according to a Fannie Mae survey – 90% say they’d rather own then rent!
So can you afford a new home? The best place to start is by gathering up your finances. Make a spreadsheet of what goes in and what comes out. Figure out how much you are paying for rent and see if that’s enough to cover your monthly payments for a home. If you’re not sure how to figure out what home you can afford there are plenty of mortgage calculators online to help you out with that.
If you feel like you can’t come up with a hefty down payment, there are options! There are plenty of government programs that will get you into a home with a low down payment or no down payment cost! Do your research and come prepared when talking to a bank about a loan. Look up sites like FHA and HAMP to see what they can offer you when purchasing your new home and know that just because you are getting an FHA approved loan does not limit you to what neighborhoods or areas you can purchase in.
Most Millennials debt is due to student loans which can get pretty large if you went for your masters. Don’t let these debt’s hold you back from owning a new home. While the Real Estate world is working on a system to make this process a little easier to get a loan without crashing the market, there are also government programs to help consolidate and loan forgiveness options to make sure you aren’t paying more than what your income can handle. Although this won’t take the debt away, it will help lower your payments which can give you a little more room in your monthly payments towards a new home.
If you are one of these young buyers who is interested in purchasing a home, don’t let this process scare you out of purchasing. Get organized, get informed, and be one step ahead of the banks. A new home might not be that far away!
Thanks to CNN Real Estate for information on this post!