Millennials, or Generation Y, are people born between the early 80s and the mid 90s. If you listen to the media, you might believe that Millennials are more interested in eating avocado toast than getting a mortgage and saving for their first home. In actual fact, 35% of American Millennials own their own home, according to a study by global bank HSBC. Do you want to join their ranks? Here are some tips on Millennials and mortgages.
Start fixing up your credit early
Only 54% of Millennials say their credit score is important to them and so this demographic doesn’t check their credit score very often. This might be a mistake because knowing your credit score is the first step to improve your credit, and great credit is the ticket to a mortgage and home ownership. There are many steps you can take to improve your credit such as paying your bills on time, getting a credit card with a high limit but spending less than 50%. Once your credit is on the right track get saving. There are many great first time home-buyer saving accounts out there as well as other high interest low access savings account options, so shop around to get the right deal for you.
Try getting pre-approved for a mortgage
If your credit score is great you could win the golden ticket: a pre-approved mortgage. There are many advantages of getting pre-approved. It strengthens your offer when the time comes to bid on a home you love. It also lets you see how big of a loan you’ll be approved for, helping to narrow down your house hunt to the right price range. You could try here for some tips on how to get pre-approved.
If more credit is making a standard mortgage an unlikely proposition right now then you could try alternative routes towards home ownership. The easiest way to get around bad credit is to put down a bigger down payment. If that’s not an option, research grants and programmes that can help you buy your first home. For example, there are programmes for people performing active military services, veterans or those looking to buy in deprived rural areas. If your credit score is low you could try getting a seller financing mortgage instead of a traditional mortgage.
If you are a Millennial do not be disheartened by the media: it is definitely possible for you to get a mortgage and fulfill your dreams of home-ownership. Start preparing early, research your options and soon enough you will be on the right track!