Millennials + Home Buying
Most Millennials are not aware that they are closer to owning a home than they realize. According to the 2017 Bank of America's Homebuyer Insight Report, 29% of Millennials still think you need a 20% down payment and another 6% have no idea what they need. Only a whopping 5% knew you could have as low as 3-5% down depending on the type of loan and/or program you go with.
What should Millennial renters be doing right now? Seeking out a real estate professional, talking with a lender, and setting a budget.
- Seeking out a real estate professional: First time home buyers should always consider representation in this process. First, this is more than likely the largest purchase you will have made thus far in life. Why would you want to do that alone? Secondly, being represented by an real estate professional doesn't cost you a dime. The sellers pay for your agent's commission. Thirdly, don't assume the listing agent will represent you in the purchase of the home they have listed. They can work with you and write up an offer, but know that they will be looking out for the seller's best interest, not yours.
- Setting A Budget: Set your budget to stay on course.
- Talking with a lender: getting an online quote is completely different than getting pre-approved.
- Purchasing a home within the next 3 months: Get pre-approved!! Why? First, you need a realistic idea of what you can afford. No need in finding your dream home only to find out you can't afford it. Save yourself the time and know your perimeters. Secondly, this makes you more attractive to sellers, especially in a hot market with multiple offers. Thirdly, lenders can help give you an idea of the closing costs. They can tell you the amount you'll have to pay in points, mortgage insurance, and loan fees. Lastly, they can let you know about ALL the paperwork that will be needed so you can start to collect those files earlier rather than close to crunch time. Save yourself the stress and get that done on the front end.
- Purchasing a home within the next year or two: Why wait until you are ready to buy to talk to a lender? A lender is a great resource in helping you to financially prepare to buy a home down the road. I can't tell you how many times I've heard stories or had buyers myself that thought they were ready to start searching for a home until they sat down with a lender only to find out they needed to do x,y and z which would put them back another 3 months or 6 months. Go ahead and talk with someone to make sure you aren't one of those buyers.
STILL NOT SOLD ON HOMEOWNERSHIP? Did you know:
- 86% of millennial buyers consider owning a home to be more affordable than renting.
- 79% of millennial buyers say homeownership will positively impacted their long-term financial goals.
- 60% of millennial buyers would encourage their younger selves to start saving for a house sooner.
- You receive a tax break for being a homeowner. The sooner a home is purchased, the more years of tax advantages you will receive.
- You can build financial security through real estate which begins with the purchase of your first home.
Want to discuss purchasing your first home, feel free to give me a call, shoot me a text, comment below or send me a email! Whatever is easiest for you!
Coldwell Banker Collins-Maury
Source: 2017 Bank of America's second annual Homebuyer Insights Report