Millennials and Mortgages
The American Dream - We have all heard of the white picket fence and green lawn that we get to call our own, but for many who fall into the “Millennial” demographic, that dream feels so far away. Millennials are defined as 18-34 year olds, and the array of economic issues that have fallen on that group’s shoulders have greatly affected their ability to grab their slice of that American Dream. Unemployment Rates have skyrocketed, right along with Education-related debts. This generation also witnessed how the Mortgage Industry was a huge factor with their parents, friends, family and neighbor’s getting burdened with risky sub-prime loans, some who lost their homes and savings in the process. While home-ownership is still a goal for much of this generation, many factors are keeping them from being able to, or making the move to start.
So how does that trend start to change? What steps can a young professional take in order to realize their property goals, and stop the trend of renting, where your money is going towards someone else’s equity? Here are some simple tips that a Millennial can use to get moving towards their goals:
Learn your personal profile:
There are 3 main factors in qualifying for a mortgage – Credit, Income, and Assets. It is essential to learn where you stand on these components, and get a plan in place to get where you need to be. Speaking with a Mortgage Professional can be a great way to get a free consultation on how your income looks on paper, what issues might exists in your credit profile, and how much money you may need for down payments – It may not be as far away as you think!
Avoid large debt payments:
While that flashy new car is exciting, it can have a serious impact on your ability to qualify for a mortgage if you lease or finance it. Those monthly payments take away from monthly income that could be used towards a home. For instance, a $350 car payment could be the difference between qualifying for a $200,000 home and a $270,000 home. If owning a property is a goal you want to achieve, keeping your other monthly payments low can make a big difference.
Make a goal and a timeline:
Saving up $10,000 may sound like an impossible task, but if you break it down to manageable figures it can happen. Can you save $500 this month? If so you could have that extra $10,000 in less than 2 years. In that same amount of time, you could also improve your credit, lower other debts and maybe even get a raise. By the time that 2 years are up, you will be in a tremendous position to purchase. Not everything can happen today or this month, and good things take time and hard work to obtain. In two years, your financial picture can really improve and help get your goals achieved
Brendan Beatty is a Licensed Mortgage Broker in Cape Cod, MA – For questions, comments, or anything else, you can reach him at firstname.lastname@example.org | NMLS# 1090852