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5 Home Buying Tips for Millennials

posted on Saturday, June 1, 2019 in Education

High student loan debt is seen as a major obstacle to homeownership for the millennial generation. A survey by Apartment List found that student debt has been a major factor in millennials deciding to delay purchasing a home, despite the fact that nine out of 10 millennials desire to own a residence.

Although many millennials are delaying the purchase of their first home, that delay may not be as long as many would expect. A survey by Research Now found that homeownership for people ages 28 to 31 increased from 27 percent to 47 percent over the last two years. Additionally, homeownership for people ages 32 to 36 increased from 46 percent to 57 percent over the same time frame.

Putting off buying a new home can actually be a great strategy to make homeownership more realistic. It can allow you to work with your bank to create a savings plan that can help you save for your down payment.

Following are five tips that can help millennials on the path to homeownership.

  1. Start saving. The sooner you start saving, the better position you will be in when you are ready to buy a home. Consider opening a first-time homebuyer savings account that will allow you to claim a credit on your state income taxes.
     
  2. Reduce your debt. Pay down as much of your existing debt as possible. Doing so may make budgeting for a future mortgage payment less stressful. It will also strengthen your credit history, allowing you to qualify for a better interest rate when you’re ready to buy.
     
  3. Get pre-approved for a home loan. Once you’re ready to enter the housing market, look into your financing options and start the approval process for your loan. By getting pre-approved, you will have a solid understanding of what type of home you can afford, and it will eliminate that step when you are ready to make an offer.
     
  4. Calculate additional expenses. As you budget for your mortgage payment, it’s crucial to consider other expenses that come with buying a house, including property taxes, insurance and closing costs.
     
  5. Stick to your budget. Once you know what you can afford, stick to it. Don’t look at homes way outside your budget. And if a seller is unwilling to meet you at a price that you are comfortable with, walk away.

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