November 27, 2015

If you’re under 35 years old and hoping to purchase a home in the near future, you’re definitely not alone! In fact this last year economists reported only about 2% of millennials were among the home buyers across the U.S.! That’s pretty insane considering you are our country’s largest generation!

But according to Realtor.com, every study about millennials and housing says the same thing: You believe in homeownership as an investment.

As your future real estate agents, we care about your success! So here are ways you can prepare for the day you are ready to purchase a property:

1) REDUCE YOUR DEBT

Your debt-to-income ratio will definitely affect your options for a home loan. To qualify for a mortgage, your DTI can be no more than 43%. So your mission needs to be reducing any large student loan, credit card or auto loan balances. And avoid new debts if possible. The ideal DTI is less than 15% of your income.

2) BOOST YOUR CREDIT SCORE

For millennials who bought a home this last year, the average FICO score was 714 (an FHA mortgage is 682). Unfortunately how credit scores are calculated make it tough for you to qualify. They look at lengthy credit histories -- not your consistency in monthly payments like rent, cellphone bills, and utilities. So do what you can to get a score between 650-750. The closer to 750, the lower your interest rates and therefore your mortgage payments.

3) SAVE FOR A DOWN PAYMENT

You’ve probably heard the ideal down payment is 20%. While it’ll certainly get you the best rate for a loan, the average millennial home buyer put down only 7%. So try to shoot for 10% and check out your options. Conforming mortgages only require 3% (if you’re a veteran you can qualify at 0%). Ask a real estate agent or lender about local down-payment assistance programs. And of course save as much as you can! You’ll not only need a down payment, but an emergency fund so no financial surprises wreck your credit while you are house hunting.

4) LOWER YOUR RENT PAYMENTS

No doubt, Colorado’s rental prices are high right now! Since the average renter spends more than 30% of their income on the roof over their head, consider paring down this expense. To prepare to become a home owner, double or triple up on roommates, settle for a smaller place, or spend a season with Mom and Dad.

And if you have questions, feel free to contact me for a no-obligation, consultation and to put together a success strategy to meet your goals.

Source: http://www.realtor.com/news/trends/letter-to-young-millennials

No comments:

Post a Comment

About Cynthia

Cynthia M. Parker and her "Home Selling System", service the entire metropolitan Denver area. She has been consistently helping buyers and sellers for over twelve years. "I believe a real estate transaction, like life, is a process. My business approach is just that.....a process. No nagging and relentless sales pressure".

"My programs offer free information and a non-intrusive, innovative way for buyers and sellers to obtain the knowledge they seek. I am able to provide state-of-the-art personalized service, be far more accessible to my clients and quickly provide them with the latest market and financial information. My objective is not to persuade you with empty promises but show you the benefits of working with a client-focused agent, interested in helping you make the best decisions for you and/or your family and/or portfolio. My non-threatening approach, keeps clients informed and excited about the home selling and home buying process. My consultative approach and technology focus, enable me to present a total package for investors so they are fully informed when determining which assets to acquire".

Cynthia M. Parker, ABR®,SFR®, CDPE®’s Specialties:

Working with sellers, buyers, investors, seniors, move-up buyers, empty-nesters, distressed sales to include...short sales, REO/lender-owned properties. She also assists with property evaluations, analysis, 1031 Exchanges, CAP rate determination, ROI, etc., and all aspects of the contract negotiating process.