Millennials hold the record as today’s largest number of homebuyers in the market. Unlike the generations that came before them, most are not after a starter home. They are looking forward to buying a house they can call their forever home. They would instead buy fixer-uppers they can decorate themselves. While many are buying houses, not all are making a home purchase for the family.
Statistics show that many millennial homebuyers are single. Most of them are single women wanting to be homeowners. This goes to show just how different millennials are from other homebuyer cohorts.
But then, many millennials, or Gen Y as they are also called, face numerous home buying challenges. This goes beyond the financial issues they are facing. The discussion lists challenges millennials face when trying to buy a house.
Buying a House They Can Afford
Financial challenges are, by far, the biggest problem millennials have when buying houses. Many of them still have debts under their name, with student debts and credit card debts being the usual culprit. Since debts can take a dent in one’s credit score, this can impact one’s ability to get approved for a mortgage.
Thankfully, numerous loan programs make the home buying a lot more affordable. One can now buy a house provided they qualify for affordable mortgages. The key is to explore your home loan options and find a reliable mortgage loan officer you can trust.
Shopping for mortgages and lenders will help you find the right home loan option you can comfortably afford. Don’t fall victim to predator lenders who never work for their client’s best interest. Get quotes from different lenders and compare before choosing.
It also helps that you explore for-sale by owner listings. These are the kinds of homeowners trying to sell their houses without hiring a real estate agent. Try to negotiate a better price and see if you can strike a good deal.
There are also houses offered off-market. These are properties being sold but are not publicly marketed. Sellers choose to do this to negotiate with buyers directly.
Don’t forget about digging deeper and knowing about your finances. Calculate your debt-to-income ratio and determine where all of your money is going. Make sure you are saving money towards your down payment to lower your monthly mortgage rate and interests.
Competition from Cash Homebuyers
These days, there is an uptick in the number of home buyers willing to pay for a house in cash. This worries some millennials since they don’t have enough money to pay for a place in full. The rising home prices only make it harder for this generation to pay in cash.
Many sellers are naturally drawn to cash buyers. They are even willing to offer their homes at a better price in exchange for a cash sale and a faster closing. Millennials should not be discouraged as there are ways to get around this dilemma.
One way to beat cash buyers is to make you look like a serious home buyer. You can do this by getting a pre-approval before house hunting. A pre-approval will help you check how much you can borrow and give you confidence knowing your lender’s already got your back in buying a house.
You can also consider increasing your earnest money deposit. Your earnest money is the deposit you pay the seller to reserve your right to buy the house. Note that the seller gets to keep the deposit if you back out for no reason.
Your last resort would be to outbid other buyers. Since many cash buyers are looking for discounts, outbidding them would make the seller think about your offer. This is a sure way to stand out from your competition.
Saying No to the Bright Lights
Living in the city offers many perks. You get to live in a place where all possible amenities that make your life easier are readily available. Going to malls, experiencing the nightlife, and going to work becomes a tad easier.
These are but some reasons why millennials are drawn to cities. But then, the cost of living in metropolitan areas is considerably higher. This means housing is a lot more expensive in cities.
If millennials are willing to explore rural and suburban cities, they can find houses at a cheaper rate. Homeowners here are more inclined to negotiate when selling their homes. Aside from living near the countryside, millennials can enjoy a bigger yard and a more peaceful neighborhood.
These days, technology makes it possible for millennials to pursue a career from the comforts of their home. Some companies are allowing more flexible working hours and telecommuting. This enables millennials to move even in urban settings and still make a living and pay their mortgage.
Millennials are at a ripe age to make home purchases. If you already saved enough cash for a down payment and you think you can afford to become a homeowner, then it could be the best time to buy a house. There may be challenges coming your way when buying a home. But remember that there are ways to resolve them if you are really into buying a house.