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Millennials in the Market: A Realistic Guide to Buying Your First Home

Millennials in the Market: A Realistic Guide to Buying Your First Home

It's back to school time for many; but for millennials, who’ve either just graduated from college or who have been in the working world for only a few years, it may be time to do a little back-to-school shopping for their first home. Buying a home is a daunting task for even the most seasoned buyer; so, for someone new to the market, searching for their first home can be terrifying. Millennials are not only facing that terrifying feeling, but some are also facing it with mounds of student loan debt, a less-than-what-they-expected career and dwindling hopes that they can even gain mortgage approval.

The picture may seem dim for the 20-something and 30-something crowd that is seeking their first home; but, good news is on the horizon. Many millennials can – and do – qualify for a home loan and grab that slice of the American Dream that includes home ownership. So, if you’re in that millennial crowd, what can you do to start carving out your dream of owning a home? Here are a few tips that may help millenials or any first-time home buyer:

  1. Recognize Your Potential. Before you embark on your first home search, know that you are seeking something that you can attain. Don’t rule yourself out of the market, because someone’s told you that you must have 20% to put down on your first home. Talk to some lenders to see what their individual requirements are. Many lenders offer financing options where you can put as little as 5% down on a new home. With an FHA loan, you can put down as little as 3.5%.
  2. Apply a Little Discipline. Whether you’re planning to put down 5%, 3.5% or 20% on a new home, you’ll be doing your pockets and your savings account a favor by practicing a little discipline. You may love that skinny latte, but cutting back on your morning or afternoon Starbucks run can add up fast. It is also harder to spend money you can’t see. Set up a direct deposit from your pay check into your savings account and you’ll start saving instantly.
  3. Be Generous with Your Bills. Although cutting down on spending is a great idea, it is also a good idea to put a little extra money toward any loan and credit card payments you carry. Your lender will love to see that you are making payments on time and working to improve your credit score is always a plus.
  4. Put the Internet to Work for You. Most millennials are technologically-savvy by nature. So, use that technology to your advantage. You don’t have to hold a conventional garage sale to make a little extra cash. Save for your down payment by auctioning some items on eBay. Surely, you’ve got some things that you don’t use anymore or that you could do without. Appeal to that online buyer and save your profits!
  5. Seek the ‘Rents for Extra Help. Whether you’re living under their roof while you save for a down payment or they’ve offered a monetary gift to help with your home purchase, your parents are a great place to turn for some help and advice during the home-buying process. True, they probably bought their home in a vastly different real estate market, but they’ve got home-buying know-how that you simply do not.
  6. Enlist an Experienced Agent. While it is possible to do most things from your iPhone, tablet or other smart technological device, there is still something to be said about having a reliable, experienced real estate agent on your side during your home search. Look for someone with local connections who has worked with other agents in the market. Yes, a good agent will be more helpful than the latest download.
  7. Set Realistic Expectations. Many millennials want to be where all of the action is. Naturally, they’ll look for new homes in the trendiest spots, so they won’t miss any of the excitement. Keep in mind that those trendy spots can carry a hefty price tag. Instead, look for a more affordable first home that may be near your job or at least transportation options that can get you where you want to be.

Of course, it is not only millennials that enjoy the luxuries at our fingertips today; but, the home-buying process remains a slow, arduous task. If you’re new to the market, don’t rush it. Take your time and get pre-approved for a loan, so you know what you can afford. You may make an offer on one, two, three or more homes before you strike a deal that is best for you. Give yourself the time to make an educated home-buying decision, so you’re happy with it in the long run.

If you’re a millennial who’s ready to start the home-buying process, contact an experienced real estate agent at Berkshire Hathaway HomeServices The Preferred Realty and get started today.

 

 

This post is sponsored by PA Preferred Mortgage:

Pennsylvania Preferred Mortgage is a full service mortgage banker and is a member of the Prosperity Home Mortgage, LLC family. Specializing in residential and refinance loans, Pennsylvania Preferred Mortgage offers a wide range of mortgage products, including fixed and adjustable rate mortgages, jumbo loans, Federal Housing Administration (FHA) and Veterans Affairs (VA) loans, and renovation financing. Learn more at www.papreferredmortgage.com.