How Millennials Are Financing Their First Property 

The dream of owning a home still rings true to millennials. While it was first reported that the trends was that millennials were opting for rental properties, recent research has shown a 63.9% increase of homeownership among the demographic. It’s partly due to the fact that they’re hitting the age where settling down becomes appealing. But millennials may have to face more obstacles than most home buyers. Javier Vivas, an economic research manager, explained that this is because “Millennials are mostly first-time buyers and they are competing against repeat buyers who have more buying leverage and experience.” What also needs to be considered is that many young professionals still have to pay off their student loan debts. In reality, many millennials confess that high student debts have delayed their dreams of owning homes. Since many millennials don’t have the means to buy homes upfront, financing is their next best option. Here are a handful of ways to keep up with the costs: Read more on local news here: The 5 Top Home Buyer Turn Offs[image credit: Discover Homes Miami

1. They get approved for mortgages early on 

A common mistake first time buyers make is not securing a mortgage pre-approval before looking at houses. Since millennials are a research-heavy generation in general, they make big preparations before entering the home buying process. It’s typically the same approach they make when buying a new pair of shoes or a new smartphone. Getting mortgage pre-approval is a long process, especially if the person doesn’t have good credit. Discover Homes Miami mentioned that it involves a lot of documents as well as meetings with a mortgage officer. It’s a process that should be started more than a year before looking for a house. While this is ongoing, it is advisable to avoid any suspicious banking activity, such as depositing or withdrawing large sums from or into your account.  [image credit: Time

2. They have roommates who share the monthly costs 

Millennials would do anything to get their dream homes, even if it means sharing the costs. Time Magazine interviewed 27-year-old Gabriella Cuzzola who bought a condo in New Jersey with her husband. She mentioned that they have two friends living with them who help with the down payment and closing costs. When asked if it was a big sacrifice, she said it can be stressful, but since they were close friends, it’s usually a lot of fun.   [image credit: USA Today]

 3. They move back in with their parents to save money 

It may be a plan that’s frowned upon in most circles, but some millennials see it as an effective way to boost savings fast. Almost 40% of young adults still live with their parents or relatives, according to research. Last August, USA Today’s Adam Shell featured a 25-year-old woman who did just that. Meagan Walsh shared that it was initially her parents’ idea and she just “rolled with it.” After spending two years back at her parents’ place, Walsh was able to save enough money for the 20% down payment required to buy a four-bedroom home.  [image credit: Quartz

4. They get second jobs 

Based on a 2016 survey, more than one-third of working millennials earn extra income from side jobs. Since young adults already have student loans to deal with, taking a second job is logical. Certain accounts of millennial homeowners say they get help from the money earned from websites they’ve started, or freelance gigs. Interestingly, it isn’t mainly the opportunity of additional cash that drives them to take on second jobs. The “side hustle”, as it is termed by Quartz, provides a hedge for millennials against feeling dull or stuck in life. This is why the side jobs are usually a lot more different than their regular day jobs.

Article written by Martin Wiggins