Buying your first home can seem intimidating. Many Millennials are under the false assumption that it isn't even possible for them to become homeowners. Sure, our generation hasn't been handed the easiest deck when it comes to the economy, but home ownership is well within reach for many. In this post, we'll look at 6 common reasons Millennials believe they can't buy. As a Millennial home owner, I tackle each misconception and show you home ownership is possible for you!
6. “I don’t know the first thing about buying a house!”
One of the biggest failures of our education system in the country is the lack of basic personal financial education we receive in school. I graduated high school and college having received no formal education on anything from credit scores, to the process of buying a home, or even how to write a check. Fortunately, I am extremely passionate about home ownership for my generation and can help you with every step of the way. The process may seem daunting at first, but with the right education and support, you too can learn this important life skill.
5. “Home ownership will tie me down!”
Our generation loves to travel and explore the world. Many of us hate the idea of being tied down and stuck in one location. Home ownership doesn’t have to mean you stop your dreams of exploration! In fact, it can help along the way. You can always rent out your home or a room or two while you’re out fulfilling your need for wanderlust. If I were to rent my home out now, I could actually have money in my pocket to spend on travel because my mortgage payment is lower than what I could charge short-term renters.
4. “My credit sucks! / I don't even know my credit score!”
Having good credit definitely helps when you’re buying your first place. Maybe you had medical bills that you fell behind on or a credit card you opened years ago that you neglected to pay and have avoided thinking about. You may even have no credit at all, as was the case with my husband when we first got married. The first step to addressing your credit is to know where you stand. I recommend downloading the CreditKarma app or getting your free monthly score from your bank, which many are offering these days. You can also run a completely free credit report once per year through annualcreditreport.com. Once you know your score, you can begin to work on improving it. I am happy to help with guiding you on how to build and improve your credit!
3. “Renting is cheaper.”
This is just downright false. Asheville has high rents and low vacancy. A mortgage on a $175,000 can easily be less than $1,000 per month*. The average 2 bedroom unit in Asheville is averaging $1,180 per month, which is the highest rent in the entire state! Worse yet, rent prices continue to rise. Every month you give rent to your landlord, you’re helping them build equity on your dime!
*Many factors go into determining mortgage payments. I can connect you with a mortgage professional to find out your true cost of monthly payments and how much you can afford.
2. “I’m not married.”
Millennials are saying “no” to marriage in record numbers. If we do decide to tie the knot, we are doing so later in life. Recent studies suggest that as many as 25% of Millennials will never marry at all. Maybe you haven’t found that special someone just yet, or the idea of marriage just isn’t for you! Either way, your relationship status doesn’t need to impact your financial future. Having two incomes certainly helps on a home mortgage application, but there are no rules that say you have to be married to someone to buy a house with them. I have several friends who have purchased homes with their long-time partners. You can even buy a house with a close friend! Obviously, there are lots of things to consider regarding your relationship when you make such a big decision. Single people can certainly buy houses too. I was single when I purchased my first home. It’s just a matter of finding a home that fits within your budget!
1. “I can’t afford a down payment!”
It’s hard enough paying the bills to get by in a town where wages are way out of line with living expenses. Saving $10,000 or more is a daunting task that causes many Millennials to assume home ownership is out of reach. The truth is, the proper education about available financing is what has been out of reach for our generation. In 2018, there are many creative lending options available with down payments from 3.5% all the way down to nothing! With options like FHA and USDA loans along with down payment assistance programs, Millennials have plenty of options to choose from to make buying a home a reality. Closing costs are negotiable and can sometimes even be financed by the seller. Buying a home could mean putting out less cash than first and last month’s rents and security deposits that you’re already spending to move into a rental!
Now that you know YOU CAN buy your first home, why not reach out to learn more about how you can prepare yourself for that next big step?
Town and Mountain Realty