The popular belief is that Millennial home buyers— people between the ages of 22 and 40— would be quite a small number. There’s an even smaller belief that they’d be making big moves in the real estate game, but they are. For the seventh year in a row, Millennial buyers have exceeded Baby Boomers, according to a National Association of REALTORS report, comprising 37% of home buyers. In 2021, over 80% of homes purchased by Millennials were single-family homes between $150,000 and $350,000.
So how are Millennials defying their perceived odds? Strategy and taking necessary steps and precautions. For first-time buyers, it’s important to find representation before finding their house to-be so as to avoid common pitfalls due to lack of experience with real estate in order to maximize the chances their offer will be considered.
Some other steps to ensure success are…
Pay off outstanding debt
Student loans, automotive, credit card are common types of debt Millennials, often fresh out of college, face when it comes time to save for a down payment. Consulting a trusted mortgage banker can help calculate how much should be put down and how much will increase the chances of qualifying.
Find a reputable real estate agent
Working with a knowledgable agent can cut through a lot of the treacle, as they can be guides through the whole process, sharing their experience, expertise and networks, including mortgage bankers, title and escrow, inspectors, appraisers, attorneys, and more.
Monitor and improve credit
When it comes to buying a home, money is important to be sure, but having a good credit score can go a long way as well. There are plenty of credit monitoring services, both free and paid, to help keep track of credit scores. But speaking with a mortgage banker can aid in making certain credit is being repaired in a way that can qualify buyers for the most suitable loan.
Larger down payments
Simply put, the more that can be put down, the bigger the positive impact on qualifying. Save, save, save!
Get pre-approved for a loan
Removing risk can extend a buyer’s chances of eligibility. Many real estate agents require pre-qualification to work with a buyer, especially with a trusted and respected lenders with good reputations.
Mortgage bankers, not mortgage brokers
Because mortgage bankers have more control over the loan process, working with one can move the process along more smoothly. Often, mortgage brokers are middle-men between the buyer and the lender. Mortgage bankers, however, underwrite loans in-house, selling loans directly to investors, expediting the experience.
Finding an affordable house in a seller’s market can be key for first time buyers. While home prices are rising, interest rates are quite low. Finding a home within the buyer’s means will be the path to follow.
Educate, Educate, Educate
Learn the home buying process. Read up on best practices. Talk to people in the know. Suss out the good information from the bad. The internet can be a plethora of knowledge, but there’s also a lot of conflicting facts and data. Talking to several reputable agents, lenders and bankers will lead to a better understanding of what lies ahead for making that important purchase.
Of course, the above tips are relevant to more than just Millennial home buyers, so whichever generation you belong to, go into your purchase journey with all the knowledge you can to ensure success.