According to the PEW Research Center, the Millennials (Born from 1981-1996, or 22-37 years old), are the largest living generation in the US today surpassing the Baby Boomers (born from 1946-1964 or 54-72 years old). The cohort between the Boomers and Millennials is called Generation X while the contemporary period after the Millennials is the Generation Z. The Silent Generation is comprised of people born in 1928-1945, which, sad to say, most of them are forever silent already
Many people today think of millennials as the restless and sometimes, reckless individuals consumed so much by the wonders of virtual reality. However, based on scientific studies compiled by TERRA INTERNATIONAL REALTY it has been established that 80% of millennials have the strong desire to buy their own homes. The reason they cannot do it right away is because of economics. Especially, of the usual 20% downpayment that even if reduced by 50%, only about 33% of millennials would be able to save that amount in a period of five years or a little less.
To help you, the millennials in your quest to buy new homes, TERRA INTERNATIONAL REALTY has prepared a list of things that you should and should not do before even thinking about buying your first homes:
Evaluate Your Income and Credit History:
- Income history is essential when applying for a mortgage or home loan of any kind. Some lenders require self-employed applicants to indicate up to two years of consistent self-employment income.
- Keep tabs on your income history as well as your credit report. If possible, do what you can to elevate your current credit score via debt consolidation, on-time credit card and loan payments, and low credit utilization.
- Have a consultation with local mortgage brokers to understand their requirements for applicants when it comes to income and assets history and documentation. Only enter the housing market if you feel entirely confident of your financial standing.
Be Specific with your Needs and Options:
- Not all mortgages are created equal. While most homebuyers obtain a conventional home loan, other options do exist.
- If you intend to buy a home in a rural area and are within a certain income bracket, you may qualify for a USDA Rural Housing Loan. These loans are designed to alleviate the burden of a down payment and give rural residents lower rates.
- Millennials making their first home purchase may be eligible for FHA Mortgages, which often offer more forgiving interest rates and down payment terms.
Take Your Time while planning for your next action:
- A home purchase is a significant decision and should not be treated lightly. It can also be a thrilling experience and a cornerstone in your path toward independence.
- Give yourself the time you need as you wander the housing market, inspect prospective homes, and dream up your future. Trust your intuition as you proceed and always stay informed.
- Taking your time also enables you to consult family members, friends, and other millennials who have successfully purchased homes in their twenties.
- Lastly, keep your eyes on the future at all times. Homeownership is a concept that spans years and even decades.
Build Relationships with Lenders and Homeowners:
- Millennials are savvy networkers, who can connect easily with colleagues, friends, and other inspiring humans.
- Take advantage of your social dexterity by building relationships with mortgage lenders, real estate agents, and current homeowners.
- Consider joining local group meetups organized through social media or other platforms. These can connect you with other prospective homebuyers and existing homeowners to give you valuable insight into the market and industry.
- If you are purchasing a home that is far away from your present location, be absolutely confident in your choice prior to relocating. Study city demographics and proximity to life essentials, such as schools, medical centers, and grocery stores. If possible, visit your future community before you plunge into the real estate market.
Be Firm Even if Friends and Relatives Seem to Disagree With your Decision:
- Millennials often get a bad rap, whether or not they are thinking of “settling” or traveling the world. Entering the housing market can be discouraging at the outset, particularly for first-time buyers.
- Some millennials face parental or peer pressure to either purchase a home or stay away from mortgages.
- Whatever the case, choose confidence in your pursuits. Don’t let others dissuade you from homeownership or nomadism. Build confidence through research, data insights, and solid networking.
The bottom line is purchasing your own home is a more financially sound decision than committing to a lifelong relationship with one’s landlord. Navigating the housing market is much like exploring a new career, as it requires dedication and knowledge. If you’re a millennial dreaming of your own comfy couch and kitchen keep this tips in mind before signing on that dotted line.
