Although it’s taking them longer than their elders, millennials are buying homes in droves. In fact, they currently make up the fastest-growing segment of buyers today, according to a recent National Association of Realtors report. Here are four smart tips for millennials who are just wading into the home buying market!
Pay Off Debt
Student loans are the biggest challenge facing millennial homebuyers. In fact, over 44.7 million Americans are paying off a national student loan debt of $1.71 trillion—and, in 2019 alone, the average student loan debt was $29,900 per college graduate. Millennials also have consumer debt which postpones home ownership. 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 and qualify for a better interest rate!
Save Up for the Down Payment
If you are struggling to save for the down payment, you are not alone. One fourth of millennial home buyers could not 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 are dealing with so many other expenses. Fortunately, there are loan options that either offer low down payment options or do not require a down payment at all! It’s important to talk to an expert loan officer early on to learn about your loan options and how to qualify.
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 are 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.
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!
Ready to begin your home buying journey? Contact one of our expert loan officers today to get started!