Now is the time for the Millennial generation to take over the home purchase adventure. Slowly but surely, Millennials are starting to settle down. Gone are the days when other generations think that they will never buy homes. According to a prediction by Realtor.com, Millennials will outnumber the share of the total home purchased by Gen X and Baby Boomers.
If you are one of these predicted statistics that will purchase their home soon, here are the tips all first-time homebuyer millennials can start with:
Tip 1: Pay Off All Your Debts
Before getting another debt, it would be best to pay off all your existing debts. The biggest financial challenge most Americans face is student loan debt. In 2019, the average student loan debt climbed to $35,000 per graduate. That was a 116 percent increase in ten years. After student loans, car loans and credit card debts come next as reasons millennials postpone acquiring homes.
In general, it is ideal to have no debt before applying for a real estate loan. If you no longer have financial dues, you will get a better credit score. With a better credit score, you will have more chances of getting more favorable terms. Because buying a house is a huge investment, you have to make sure that you can afford it. With no debts, you will have less financial headaches and more freedom to make the best choices.
Tip 2: Save Up for Your Down Payment
Once you’ve cleared off all your debts, it’s time to prepare yourself for the big purchase. You need to save up for your down payment. The majority of people need to apply for a mortgage to afford a home. There’s nothing wrong with that. In fact, according to a report, 97 percent of millennials buy their houses with the help of mortgages.
Another secret to getting better mortgages is by having a big down payment. Doing so could help you lower your interest rate and pay off your mortgage faster. Aim for at least 20 percent of the total amount of the home you want.
Just remember that saving could be difficult, and you are not alone in that struggle. Even so, if you stay patient and keep your eye on the goal, you will save up the amount you needed.
Tip 3: Stand Out in a Crowd of Competitors
Competition is still prevalent in the real estate industry. There is competition in both the selling and buying aspect. Now that you have paid off all your debts and completed your down payment, you need to find a reasonable home price and win against your co-bidders.
It is not only the Millennials that are looking for home nowadays. The Baby Boomers are also starting to downsize into starter homes that Millennials are eyeing. They have the advantage of having more money and home-buying experience, so they serve as your main competitors, besides other Millennials.
To help you have a better chance of getting excellent opportunities, such as an affordable house and better payment terms, consider working with an expert. They know the best offers out there, and the dos and don’ts when it comes to first house purchase. Look for an agent that prioritizes your needs and help you find a deal that addresses all your concerns.
Buying a house and applying for a mortgage loan can be intimidating, especially for a first-timer, but with enough preparation and professional assistance, you’ll be well. Make sure to find an agent that will be more concerned with your bank account than theirs and have years of experience to use to your advantage.
If you’re looking for mortgage rates or loan solutions in California, we can help you with that! We’re a premier mortgage broker that serves the Greater Los Angeles area and entire California. Contact us today at 818-425-8867 and work with us!