The Great Recession left a big impression for many of us, especially millennials who were just coming into home buying age. Today, many millennials are timid about entering the housing market as the wounds are still fresh. But with growing wages, improving housing markets, and growing families, these young millennials are now being pushed to purchase a home.
First Time Buyers
Before a family buys a home they should analyze their financial situation and determine what they can afford. Today, 35 percent of Americans pay cash for their homes, but many of these people are older, well-established in their careers, and typically are using the profits from their previous home toward their new home. If this is your first home and don’t have a pile of cash it’s ok, this is why you’ll need a mortgage.
It’s like when you buy a car, you don’t finance the entire cost of the car. There is a large sum of money put down initially and then you finance the rest of the car into monthly payments. This is exactly what happens when you buy a home and obtain a mortgage. The standard down payment is 20 percent, which will help you better qualify for a loan and eliminate mortgage insurance.
20 percent can be a lot of money, especially for young families who may still be paying off student loans with child care expenses and who are not making Silicon Valley wages. But this is ok, there are many mortgage options that are designed to help young families afford a home. Many of these options only require 3 – 5 percent down on a home. For more information or questions on which mortgage programs are right for you, call Babak, “The Mortgage Guy,” for personalized service at 562.508.4004.
Qualifying for a Home
One of the most important pieces of information when qualifying for a home loan will be your credit score. A “good” credit score is anywhere between 680 and 739, while 740 and above is considered “excellent.” Your credit score will be used to determine how successful you will be on your payments toward your mortgage. If you need help cleaning up your credit, here are 5 ways in which you can do so.
One of the most helpful things you could do to help speed up the process and better your chances of getting the home of your dreams is by being pre-approved for a mortgage. Here are 6 Reasons why you should be pre-approved and how you can do so.
Remember to look for homes that are affordable and that encompass the needs of your family. Don’t expect your ultimate dream home, but recognize you are just starting out and on your way up.