5 Things Millennials Can Do Now to Buy a Home
According to HousingWire, home ownership among millennials (especially older millennials) continues to rise year over year. Many millennials worry that student debt or home prices could keep them out of the market, but there are a few key things that can help make home ownership a reality! If you are a millennial and are working towards buying your dream home, here are five things you should consider.
#1. Create your budget
Before you start looking for a home, create a comprehensive budget that outlines your monthly housing spend. Having a number in mind will help you identify how much you can afford to spend on your mortgage payment. Do you want your mortgage payment to be similar to your rent payment? Or can you afford to spend more each month? These are important questions you should answer before you start the process.
#2. Come up with a debt plan
The average millennial owes $42,000 in student debt, according to a study by Northwestern Mutual. Your educational debt may not hold you back from home ownership, as lenders have created opportunities that make it easier for buyers with student debt to buy a home. Make sure you have a payment plan in place so you can tackle your debt and pay for your home too.
#3. Check your credit
Did you know that you can get a free credit report every year from www.annualcreditreport.com? Your credit score plays a big role in the mortgage program you qualify for, so it’s important to know where you stand. If you need to boost your score quickly, you should start by reviewing your report and disputing any errors. You could also bring current accounts with late payments and keep low balances on credit cards and other revolving credit. Don’t close unused, older credit cards, since having a credit history is important.
#4. Identify your down payment savings amount
Don’t worry if you don’t have 20% saved for a down payment – it’s possible to get a home for less cash out-of-pocket! We offer programs with down payments as low as 3% and 5% (your eligibility depends on your specific circumstances). If you still need to boost your down payment savings, consider some of these tactics: selling unwanted items, getting a part-time or side job, lowering your expenses, or automating your savings. Keep in mind that you may be able to use gift funds for a down payment, which could help supplement your savings.
#5. Get pre-approved for a mortgage
Going to open houses and looking at homes for sale online is fun, but don’t fall in love with a house until you get a mortgage pre-approval! Start a conversation with a loan officer to discuss your current down payment savings amount, credit history, and monthly housing budget. Not only will a pre-approval help you understand how much house you can afford, it also boosts your chances of having an offer accepted once you do start shopping.
Our passion is helping home buyers find the right mortgage for their situation, so contact us if you’re interested in your home financing options. We’re proud to help put home ownership in reach for millennials around the country!
This does not constitute credit advice. Borrowers should consult their own credit advisers.