Like so many other millennials, you might be burdened with repaying exorbitant student loans. You might think that renting is the only way to go. However, that’s not the only option.
Did you know that millennials have surpassed both Generation X and baby boomers as homebuyers?
Millennials are now an important target demographic for the real estate industry. Yes, you can own your own home.
Still on the fence?
Take a look at the top 5 tips you need to know in order to buy a home.
Real Estate in Washington, D.C.
Research states that Washington, D.C. is the number one best place for millennials to live. The city’s offering of restaurants, bars, parks, boutiques and fitness studios makes it appealing to millennials.
More and more single millennials are seen buying properties such as townhouses and condos due to career advancement. Also, instead of buying only starter homes, some millennials couples are purchasing multiple properties. It’s interesting to note that millennials are keen to invest in urban, walkable areas.
You’ll like the fact that it is located in a crucial economic and political hub. The city also offers great art in the form of monuments and museums. The area has a unique business and career development opportunities as well.
The D.C. metro area and its surrounding suburbs host several IT companies. There are also many family-oriented communities. Combine that with great job opportunities, good schools, and a steady housing market and you’re sure to want to stay in Washington D.C.
There’s also lots of different entertainment which means there is something for everyone. There is a lot for you to do such as exploring the Discovery space shuttle. Then, of course, there’s the National Geographic Headquarters and museum.
If you’re a millennial looking to buy a house in the area, getting a mortgage is the best way of achieving this. The 5 tips below will show you how to boost your chances of getting your mortgage approved.
1. Reduce Debt
The truth is you may not be able to pay off your student loans or all your other debts before you buy your home. However, as much as humanly possible you should still try to reduce your debts. You stand a greater chance of getting approved with lower monthly debt payments.
Once you apply for a mortgage, they’re going to assess your debt-to-income ratio in order to decide if you’re a good loan candidate. The less you owe the better your profile will look. You should also aim to pay off any revolving debts such as credit cards.
2. Improve Your Credit Score
A higher credit score gives you a better chance of getting your mortgage application approved. Start by paying your bills on time. Your payment history, which is a crucial element in the calculation of credit score, will look good when you consistently do this.
Also, it’s important to reduce your debts as this is a great contributor to your credit score. Similarly, correct any errors that currently exist on your credit report. Ensure that you check your credit report thoroughly before you apply for your mortgage.
3. Secure a Steady Source of Income
Getting a mortgage means you’re going to borrow a huge sum of money, having a steady source of income suggests to lenders that you’ll be able to maintain your monthly payments.
Being-self employed as a millennial can be tricky. However, that doesn’t mean that it’s impossible to get a loan. Show the lender details of your earnings, primarily your last few tax returns, to demonstrate that you’re financially stable.
You can also show them a contract with one of your highest paying clients. This will show how financially stable and equipped you are to deal with a mortgage.
4. Save Money
If you can make a huge downpayment on your home then that would reduce both your lender’s risk and your mortgage payments. The aim is to make a 20 percent downpayment since this heightens the likelihood of being approved as well as alleviates the need for you to pay mortgage insurance.
Insurance is usually very costly so paying the 20 percent downpayment will often work in your favor. It is a great way of lowering your mortgage before you even start to pay it.
5. Do Research
Being a millennial with several financial responsibilities might have you thinking that you’re an unlikely loan candidate. But having a small amount of debt, good credit, a steady income, and a sizeable saving boost your profile.
If you possess these traits don’t hesitate to research different mortgage lenders and the mortgage loans that you can qualify for. You might be surprised at how many lenders are willing to help you secure a loan to get your dream home. Do not count yourself out until you have investigated all your options.
A Final Look at Our Top 5 Tips for Owning a Home
If you’re a millennial you probably feel that your student loans and debts will not allow you to buy your own home. However, getting a mortgage can certainly help you.
One of the perfect areas to look into buying a home is in Washington, D.C. The market is opening up to Millenials and there are some great pull factors.
Before you start searching though, remember the 5 tips discussed. You need to limit your debts, raise your credit score, have a stable job, ensure you have a sizeable saving and do your research. All this will help to make it easier for you to secure the home of your dream.
Remember to aim to pay at least 20 percent down on your mortgage. This is key because having this in hand will make you an attractive prospect to lenders. It will also alleviate the need for you to get mortgage insurance which could push up your mortgage payments significantly.
If you would like more information about securing a mortgage, please contact us. We can help you make your dream of owning a home become a reality.