We hear it over and over again: “I can’t afford to buy, I can’t afford that down payment.” or “I have too much debt and student loans.” Unfortunately many millennials graduated during one of the nation’s toughest recessions. So some were forced to move home with their parents for a few years until that good-paying job was found. But according to our source, 91% of millennial renters do want to own a home! And sure enough, 34% of the 2016 US market were millennials! So some of them are achieving their goals, but how?
It’s a common misconception among millennials and younger generations that you need a 20% down payment to afford a home. But it’s simply not the case! This blog will provide you with some options that will assist you in owning a home that you might not have thought of!
Ways Millennials Can Buy:
- FHA Loans – government issued loan that requires 3.5% down payment (example: $150,000 house = $5,000 down payment).
- If you don’t think you’ll be able to save 3.5%, then this money can be gifted from a family member or relative.
- Minimum credit score of 580 is required for this loan.
- Private mortgage insurance is required when less than 20% is put on a home, however insurance costs have decreased 29% since 2014 according to our source.
- Conventional – 3% down payment with cheaper insurance (for those with
- With this loan the better your credit score, the more you
- Private mortgage insurance with this loan can eventually disappear, compared to the FHA’s insurance that can keep being assessed.
- VA Loan – Military, veterans, reservists, National Guard members and
spouses of the deceased members qualify for this loan that does not require ANY down payment!
- No mortgage insurance is required.
- However, there is a “one-time funding fee” that is financed, according to our source, which can vary based on your service status.
- Not applicable for vacation and investment homes
- No minimum credit scores are required but 620+ score is preferred.
- First-Time Buyer Programs – These loans vary by state and include perks such as: free grants for down payments, closing cost assistance, forgivable loans, and “loans with below-market mortgage rates” according to our source.
- This MUST be your first home (also applies to people that haven’t owned in the past 3 years.)
- A homebuyer education course must also be attended.
As shown there are a number of different ways for millennial buyers and younger generations to purchase a home. We can connect you with the right people!
Sick of Renting? Contact Us Today!
Many millennials realized how much money they were throwing away with renting and decided it was time to buy. If this sounds like you, contact us today to get started! We’re looking forward to your call!
Until Next Time,