For years, studies have looked at millennials (people born between 1977 to 1995) and their supposed reluctance to enter the housing market. Often considered the most “picky home buyers,” this generation tends to do more research and wait longer to make large purchases. However, it’s a common myth that millennials don’t want to become homeowners. A growing number of millennials are taking the plunge and purchasing homes. In fact, census data indicates that homeownership rates of people under age 35 have increased the most of any other age group.
With record-low mortgage interest rates and more entry-level homes available, now is an excellent time for millennials start the homebuying journey. Here are a few top tips for millennial homebuyers:
Examine your finances closely
Before buying a home, it’s important to get a clear picture of your financial situation. Student loan debt is one of the biggest reasons many millennials postpone their dream of buying a home. However, having student loan debt doesn’t need to deter you from homeownership. Consulting with a mortgage lending professional will help you determine your debt-to-income ratio and see how your debt impacts your mortgage options.
Check your credit
Generally, the higher your credit score, the better your mortgage options will be. For most mortgage loans, a credit score of at least 580 is required, but some lenders may be able to work with borrowers who have credit scores as low as 500. Be sure to check your credit reports once a year to look for inconsistencies and dispute any errors with the three major credit bureaus. You may see a boost in your credit score after any errors are corrected.
Save up for a down payment
How much money you put down upfront for a home will determine the length of your mortgage term and impact the monthly rate. Making a substantial down payment will ultimately lower the total amount you need to borrow, and may qualify you for more attractive interest rates. Today’s homebuyers typically put down anywhere from 3 to 20 percent of the total mortgage cost, although some borrowers are eligible for mortgage programs that offer 100% financing. If you’re thinking about buying a home, it’s a good idea to open a separate savings account dedicated to saving for a downpayment and closing costs.
Get a mortgage pre-approval before making an offer
A mortgage pre-approval is an important step in the homebuying process that can give you a competitive edge over other buyers. Before making an offer on a home, get a pre-approval letter from River City Mortgage. A mortgage pre-approval letter indicates that a lender checked your finances and credit and determined how much you’re approved to borrow. With your mortgage pre-approval letter in hand, you’ll stand out in the competitive housing market and feel more confident while making a serious offer on the home of your choice.
Partner with a mortgage expert
Buying a home is a major decision, and you want to be sure you have the right information and support from a trusted, knowledgeable expert before purchasing a home. At River City Mortgage, our licensed loan officers are here to walk you through the mortgage lending process, providing helpful guidance and advice every step of the way. We’ll help you explore your mortgage options and answer your questions to ensure you understand all aspects of financing a home. With River City Mortgage’s quick and easy pre-approval process, you can proceed with confidence to make a serious offer on the home of your choice.
Best of all, at River City Mortgage, we believe in taking a personal approach to mortgage lending. We’re happy to work around your busy schedule; we can even make personal visits to your home or office to review your options and answer your questions. Contact us to learn more and get started today. We’re happy to help you get into the home of your dreams!