Home Buying as a Millennial
Vice President, Mortgage Lending
Let’s face it. The term Millennial is thrown around so often that it’s hard to get thru a day without hearing it. Being a Millennial comes with its labels, sometimes even stereotypes- some good and some not so good- to those that were born in the early 80’s and after. However, this is such an important and talked about demographic nowadays because this class of individuals has entered and continues to enter the workforce. They have become the new entrepreneurs. They’re climbing the corporate ladders, impacting the economy and ultimately shaping the future of this country.
After years of many experts lamenting how Millennials weren’t interested in becoming homeowners, statistics are showing just the opposite. According to Ellie Mae, Millennials are the largest group of homebuyers today, representing about 45% of all home purchases.
Here lies the problem. Their path to homeownership isn’t easy as they are competing against move-up buyers. This has created a shortage of inventory, driving up home prices, particularly among starter homes that tend to fall within first-time buyer’s budgets. According to Zillow, home values are up 7% from a year ago with around 3% fewer homes on the market. Move up buyers tend to have additional down payment from earned equity on their home sale, and since they’ve done this once before, they know what to expect, prepare accordingly and have a buttoned up home buying plan.
So how do you, the millennial buyer, get an edge on others you may be competing with for a home purchase? Of course it’s important to work with a knowledgeable realtor, but believe it or not, it starts with financing and how qualified you are for purchasing. The stronger the buyer you are, the more options you may have when purchasing. Have you had your credit checked? A better credit rating can lead to a lower rate, which leads to a lower mortgage payment which in turn allows you to afford more home (purchase power) and come in with a stronger offer. Did you get your pre-approval from a lender and did they structure the pre-approval to show your strengths as a buyer? Did you discuss the difference between giving a low ball offer on a home versus offering the listing price? What does that difference actually mean to your monthly payment? Does the seller want to close quickly? Writing up a 30 day close might give you the edge over somebody with a similar offer putting in a 60 day close. Has your lender reviewed all your income, assets and supporting documents? Getting your financing in place helps assure a smoother loan process with typically quicker turn times from contract to close. Are you flexible on when you can move in? Does the seller know why you want to buy their home? Sometimes writing a short heartfelt letter can be the difference in winning the bid.
Let me help you by being a resource of information for you. Let’s talk about the pre-approval process and how to structure your loan so you can make an offer that not just gets you the house, but more importantly gets you a mortgage payment that you are comfortable with and aligns with your financial goals as a homeowner. Contact me here or at 708-531-8324.