You're a millennial. You're just getting going on your career, you have student debt, and the home prices are rising quickly. How can you even BEGIN to think about buying a home? Well, Chris Lord of Caliber Home Loans and Austin Schneider of Realogics Sotheby's International Realty debunk three common myths when buying a home if you're a millennial. Enjoy.
MYTH #1 - I CAN'T BUY BECAUSE OF STUDENT DEBT.
- Americans owe over $1.4 trillion in student debt and each student on average owes $37,000. How do you think to buy?
- This is a problem that the lending industry has been addressing as of late.
- There are programs out there that look at student debt differently.
- Your current debt and current payments could be looked at completely differently when a lender is looking at it.
- If you think "I have this huge revolving debt, I can't qualify for anything," think again.
MYTH #2- RENTING AN APARTMENT IS CHEAPER THAN GETTING A MORTGAGE.
- Rents in the Seattle area are ~$2,100. Why would you get a mortgage if renting is cheaper or the same?
- Well, how can you afford NOT to! Home prices have risen ~13% YOY. On a $500,000 house, this is $65,000.
- At half this appreciation, it's cheaper to get a mortgage.
- You're growing YOUR wealth, not somebody else's wealth.
- You could be missing out on a lot of growth potential, tax benefits, and more.
MYTH #3- I NEED A 20% DOWNPAYMENT.
- You're just getting going in your career, starting to make good money, but you want to travel, experience life and don't have an accessible way of getting this type of money. 20% down on $500,000 is $100,000. HOW do you come up with this type of money?
- The truth is, over 50% of all families that buy a home use less than 20% down. It's not uncommon.
- There are multiple loan programs that allow you to do this.
- Even in competitive situations, it's possible to get into a home with less than 20% down.
- Don't be intimidated. Have a conversation with a professional in the loan industry before you give up on your dream of owning a home.