There is no denying that millennials have incredible buying power in today’s market. However, in the real estate market, millennials have been slow getting into the game. Research shows that this age group does still subscribe to the ideal of being a homeowner, but there are a few factors in today’s socio-economic climate that are slowing them down.
Student loans, lower savings rates, and high housing market prices are all contributing to the slowing down of millennials becoming first time homeowners.
Of course, buying your first home is a rewarding experience, and millennials do recognize that. But it’s a big commitment—one that you should only make if the financial, emotional, and lifestyle considerations make sense for you.
Our team has developed a short guide to questions that first time homeowners should ask themselves before taking the plunge.
Am I comfortable with what I can afford?
Ask yourself if you’re okay with a significantly longer commute, or living in a less trendy neighborhood. I like to ask first time homebuyers, "What are you comfortable paying each month?" Then we can look at the bigger picture.
Do I have enough cash saved for the down payment?
You need money for your down payment and closing costs. You will also face new costs in addition to your mortgage payment. If you have limited savings, it may be time to buckle down and save more before buying.
Am I financially stable?
The amazing thing about today’s job market is that a lot of sectors are experiencing increased employment mobility. This means that your position may change, or you may be asked to relocate.
Buying may not be the best choice for you right now if there’s a chance that your employment is unstable, or if your job may require you to move to a different city.
Is my credit good?
If you have recently missed payments or maxed out your credit cards, you may want to consider waiting to purchase a home until your credit improves so you can qualify for a lower interest rate. Learn more about credit scores and how you can improve yours.
Some lenders, like newcastle.loans, will give you a copy of your credit report when you apply online.
Once you’ve taken a thorough look at your finances, what else do you need to know while getting ready to take the plunge?
Assemble your team.
Your real estate agent is your partner and a valuable asset. They know the neighborhoods and schools and will help negotiate a fair price for the house you want. If you don't have a realtor, don't worry simply email us for a referral and we will set you up with a skilled expert in the neighborhood that you are looking in.
Your mortgage lender can answer questions about how much you can comfortably afford and provide guidance at every step.
Get opinions from those you trust, such as your family and friends.
Estimate how much you can borrow.
You can get a free estimate of how much you’ll be able to borrow by using our online mortgage calculator.
You will need to input some basic information into our mortgage calculator which will populate all the closing costs and fees associated with your purchase. Getting pre approved is simple and can be done in minutes all online with our online mortgage application.
You may choose to start getting prequalified online or speak with your local mortgage lender here at NewCastle Home Loans.
You might need to provide various documents, such as pay stubs, bank statements, and tax returns. Make sure you know what papers you need and have them readily accessible. We will not ask you for documents other then what is required from FannieMae.
Our online application can help you determine what documents are needed.
Making the leap into homeownership may seem daunting in today’s socioeconomic climate - seeming skewed against millennials. Despite this, millennials are still very much invested in the idea of owning a home. This guide includes important steps you should take when the timing is right for making the big purchase.
No matter what kind of home makes your heart flutter, take the time to carefully consider the information above and, above all, enjoy the journey.