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Homebuying for millennials: What you need to know

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After 2020, the real estate market saw an upsurge in sales from a segment once thought to be elusive. Many believed the entire generation wasn’t at all interested in being home buyers, but Millennials – those born between 1981 and 2001 – are proving otherwise.

If you count yourself as a Millennial and find that purchasing your first home has become your priority this year, you’re not alone. The number of Millennial home buyers has been growing since 2019, when Millennials comprised the largest share of home buyers at 37%.

It’s not very surprising. Like everyone else, Millennials are getting older. Priorities shift as they change careers, move cities, and achieve major personal milestones like starting a family. Many find that they no longer wish to rent. Those who choose to remain unmarried are also looking into independent homeownership.

Many home sellers tend to overlook that simple fact, but we understand only too well. The good news is, we can help. As first-time buyers, you will need some tools to navigate the market skillfully. Below is a guide to help you get started.

Use the digital resources available to you

This may be a no-brainer, but sometimes it bears repeating. Going online is second nature for most Millennials. Take advantage of what the Internet has to offer to get a leg up on the ultra-competitive real estate market.

A quick Google search using the right keywords can help you get started on your search for a home and a real estate agent. Listing websites like Zillow and Trulia are great sources to learn what’s currently available in your desired neighborhoods. Even social media platforms like Facebook and Instagram can aid you. Time to get acquainted with some of these.

Get your debt in check

Outstanding student loans, auto loans, and any other debt you’ve accrued may be part of the reason why you’ve held back on going ahead with your dream of homeownership.

This is understandable and common. In Unison’s 2019 Home Affordability Report, 83% of the respondents had their outstanding student loans prevent them from buying homes.

Naturally, having outstanding debt will impact your ability to save up to buy a home, let alone qualify for a mortgage and afford the costs of homeownership. because of a higher debt-to-income (DTI) ratio. If you find that you can’t afford to buy a home this year, don’t rush. Get your finances in order first.

Diligence in ensuring you are making your payments on time is crucial and will improve your debt-to-income ratio. Lenders will love you for this. Furthermore, it will improve your credit score. Avoid making unnecessary big purchases and don’t open new lines of credit.

Take credit for your good credit

There’s a common misconception going around about Millennials not being able to understand how credit works. We know that’s not true at all. A lot of this notion stems from the observation that most Millennials are unwilling to make large purchases when they know that they will end up in debt.

Sometimes that’s just being smart about money matters. However, your credit history and score will also have an impact on your ability to get approved for a loan. Lenders will require you to show good credit history. If you currently have credit cards and loans, you can improve your credit score by making timely payments and settling balances. Getting your credit score as high as possible may help you get better loan terms.

Spendy vs. thrifty

This may sound achingly simple, but it’s easier said than done. Save. This is the magic word for those who are seriously considering taking steps to purchasing their own home.

Saving for the down payment may feel like a gargantuan task, but there’s no two ways around this one. Preparing yourself for the down payment will be challenging, but if you set your priorities in order and make a few penny-pinching sacrifices, your effort will be well worth it when you’re able to afford the listing you want.

Don’t forget to anticipate closing costs and emergencies. Set aside funds to help you cover any expenses that might pop up once it’s time to buy your first home.

For the win

It won’t hurt to reach out to real estate experts in the area for advice on how to handle the market. Are you interested in purchasing your first-ever home in Williamsburg, VA? Coldwell Banker Traditions has been providing real estate services in the area since 1885. Give us a call at 757.229.9595 or send us an email at info(at)cbtraditions(dotted)com.