Homebuying Tips for Millennials

Over the past few years, the millennial generation has been jumping into homeownership with both feet, many as first-time buyers. Millennials, born between 1981 and 1996, are now officially the largest segment of homebuyers.

If you’re a millennial who’s thinking about buying a house, congratulations! Homeownership is a great financial investment. However, the homebuyer’s journey isn’t always smooth and clear-cut. Here are some tips you can employ to make your homeownership dream a reality.

Pay Down Debt

Millennials struggle with large debt loads, especially because of student loans. If you want to buy a house, the less you owe on other debts, the better. Consider cutting expenses and/or getting a second job to decrease your debt load. This will go a long way toward making you more homeownership-ready.

Get a Stable Job

Lenders want to ensure you can repay the mortgage loan amount. A secure income is one of the best ways to show that loaning money to you isn’t risky. Try to secure a full-time job where you make a consistent income.

Save for a Down Payment

Some loan programs require 20 percent of the home price as a down payment. Now, the good news is, other loan programs may require as little as 3 percent down or even no down payment. However, the more you can pay down, the better you’ll look to lenders, and the easier it will be to secure a mortgage loan. Save cash out of every paycheck, even if it’s just a few dollars, to build your down payment.

Manage Your Credit Score

Credit scores are one of the first things lenders look at to determine credit worthiness. Keep your credit score high by making all your payments on time, keeping your credit card balances low, and applying for new debt sparingly. If you pay a creditor late, get and stay current as fast as you can.

Make (and Follow) a Budget

Create a budget with an online tool that helps you see where your money goes. From there, factor in paying down your debt and saving for a down payment. Before purchasing a home, make sure you have enough income for a mortgage payment and other household expenses. Once you set a budget, follow it closely to reach your homeownership goals.

Get Pre-Approved

Talk to a loan officer, share your financial information, and authorize them to pull your credit report. This data helps lenders determine if you can qualify for a loan. If so, they’ll extend a pre-approval letter you can share with sellers to show that you’re serious about buying their property. Being pre-approved may be the single biggest thing that gets you in the home you want.

Work With a Real Estate Agent

Trust the real estate professionals during your homebuying journey. An agent knows everything about the purchasing process and can be an integral source in making certain you make all the right moves as you look, find and negotiate for your dream home.

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