Millennials and Home Buying

Millennials and Home Buying

If you’re a millennial looking to buy a house, here are tips to help make your dream of homeownership a reality:

Pay Off Student Loans and Other Debt. Student loans are a big hurdle to homeownership for many millennials. If you have such debt, develop a plan to pay it off or at least down. Consult with your us on the best way to do this.

Make sure to know your credit score. With the average FICO credit score of homebuyers at around 751, a good credit score is absolutely necessary to secure that mortgage loan. So if yours is not quite as high, what should you do? First, make sure to pay your bills on time. Don’t take out any other lines of credit, such as a new credit card. And check your credit report for any inaccuracies and dispute them right away.

Save for the down payment. If you can pay 20 percent down, it can help you avoid paying for private mortgage insurance (PMI). But if you can’t do that, try to have 3.5 to 10 percent to put down. The more you can put down, the less you have to borrow and pay back. First, find out how much house you can afford and then create a savings plan that works for you. But…

Save as much as you can as quickly as you can due to ever-increasing house prices. Despite the pandemic, house prices keep rising, in part, due to low mortgage interest rates and low supply. But with wages not keeping up, many millennials are struggling to afford a house. In addition to a down payment, be sure to consider other expenses of homeownership: closing costs, moving expenses, utilities, furnishings, and landscaping (if you buy a newly constructed house).

Consider a smaller house. Buying a smaller house often means lower utility bills, maintenance expenses, and home improvement costs. Look at neighborhoods you might not have considered before—some may feature more affordable houses.

Seek professional help. Don’t be afraid to seek out advice from us. We have the expertise to guide you through the process.