Millennials face numerous challenges when buying their first homes. 55% of young adults between 25 and 34 years old don’t own homes as compared to 80% in 1967, according to data from the Census Bureau.
Buying a home is tough with the $1.4 trillion student loan debt, growing childcare expenses and rising rental costs. However, hope is not lost. Millennials can realize the quintessential dream of owning a home.
Millennials can employ several strategies to plan for home ownership without selling their kidneys. Here are five ways to do just that.
Develop A Realistic Budget
Now is a great time to examine your finances and create a budget for a house you can really afford. Lenders may be able to approve you for a larger loan amount than what you thought possible. Therefore, it’s imperative to be realistic when deciding on the amount of home mortgage payment you can afford comfortably per month.
Not long ago, someone said (and probably regretted) Millennials can’t save enough to buy homes because they are spend extravagantly. Well, saving thousands of dollars for down payment isn’t easy, but it’s not impossible either. And there are many low to no down payment programs available if you check with your trusted mortgage professional first.
You may have to sacrifice and cut unnecessary expenditures such as buying new outfits and even getting a new car. Living minimally can help pad your personal savings to propel you into owning a house.
Consider The Suburbs
Although it’s vital to stay near family and a lively social location, consider purchasing a house in a suburban area, where houses are typically more affordable. Plus, if you have pets they will love the larger lots and yards giving them space to play.
You can choose a less populated state where you will probably have a higher chance of affording a home. Although this may not be ideal, if owning your own place tops your list, then location will not stand in the way.
Use State And Federal Programs
The Federal Housing Administration (FHA) gives home buyers the chance to purchase houses with a very low down payment. This lower amount is quite attainable if you save toward this goal. Some states also offer supplemental programs beyond the FHA program. Find out whether you can access extra grants and subsidies.
Get Your Hustle In Gear
Although most millennials struggle with unemployment, if you have one job, look for other ways to make extra dollars. You may consider driving for rideshare services, freelance gigs and running errands for people as a way to temporarily boost your earning potential.
Owning a place to call home is great. Like anyone else millennials can buy homes. Talk to a home finance expert and your trusted mortgage professional for more information on how you can make your best investment.