Due to the considerable student debt, job struggles and different priorities, millennial don’t have enough resources to purchase a house. Millennial mostly belong to the generation of renters. However, as they enter into their 30s, some of them will be established financially, have their own family and will eventually start to show interest in owning their own home.
Below are a few useful tips from Rakhi Madan Mortgage Agent for millennial in purchasing a home.
Do the Math
To know if you can afford to buy a home, write the numbers down. Most lending institutions follow the 28/36 rule. This means that your property tax, mortgage income, and insurance must not comprise more than 28% of your gross monthly salary. Anything that’s beyond this will reduce the value of your home and will be at risk for future foreclosure.
Lenders will also consider your credit score to make sure you are financially stable to make your mortgages. Eventually, the goal is to afford monthly costs without missing your responsibilities, which means you must have a stable job, commitment, and sacrifice.
Research All the Costs Involved
You must get used to the housing market where you are planning to purchase so you can have an accurate idea of how much you can afford. In choosing a house, you don’t only consider the price; you must factor in home maintenance, insurance, homeowner’s fees, utility payments, closing costs and other factors that can easily accumulate.
Make Sure You Have Enough for a Down Payment
Because of the housing bubble, the numbers of lenders that offer 100% finance options are decreasing. With this, it’s important to pay as much down payment, which can help in determining mortgage duration and monthly rate. Putting down bigger down payment can also qualify you for loans that have low-interest rates. And, the bigger down payment you provide during the signing, the more wiggle room mortgage lenders can provide you.
Get Financial Help
You can avail financial help by qualifying for down payment assistance through the state or your employer. For instance, a buyer can be eligible for grants if he or she agrees to live in the house for a specific amount of time. Buyers can also be eligible to receive low-cost loans, which they can use for down payment.
Study the Neighborhood
Looking for the right house to buy is not that easy. You must be aware of the neighborhood that will suit you, which can help in knowing the resale value of your home. By having an idea on the value of neighboring properties, you will know if the house that you desire out prices other homes. Aside from the resale value, a home or neighborhood that is safe, accessible and near your workplace is also very important factors to consider.
Contact Rakhi Madan if you need a Brampton Mortgage Broker.