There’s some talk around town that millennials aren’t buying homes. Well, that seems to not be the case. According to Realtor.com, the prediction is that millennials will be buying the bulk of real estate in the U.S. After seemingly holding back, millennials are now making their way into buying homes. In fact, millennial homebuyers have passed baby boomers and Gen Xers for the fifth year in a row.
If you’re gearing up to buy a home, then you’re undoubtedly aware of how complicated the entire process may seem. Since buying a home has many moving parts. Most of this process happens behind the scenes through real estate agents, title companies, mortgage companies, banks, and credit unions. All of these moving parts have to work in tandem in order to make a successful sale and make closing day smooth as possible. This complicated process can sometimes feel intimidating, daunting, and confusing. So, as a mortgager, Rocky Mountain Mortgage Company would like to provide a few tips for young home buyers.
Proving Your Worth: How Your Credit History Will Help You Become a Homeowner
In a sense, getting a mortgage is like proving to your lender that you are not only able but are likely to make the payments for the home for the duration of the loan. Most loans are 15 years or 30 years. So getting a mortgage means you’ll have someone looking through your financial history in order to ensure you’ve established some record. A big part of this record is your credit history, so it’s a good place to start. However, there are other factors to keep in mind.
The Big Tips To Getting That Home You Love
- Making a chink on those student loans. One of the biggest challenges and obstacles that young homebuyers face is the student loans they face. There are over 44.2 million Americans that are paying off their student loans. In 2016, the average student loan debt was about $37,000.
- Find a lender you trust. Because the process can seem so daunting, it is important for young buyers to find a lender they can trust enough to sit down and have conversations about lending options. Engaging in the journey of getting a mortgage requires a careful understanding of the process and having someone to guide you through it will help the process be smooth.
- Improve that credit score. It’s not something that is taught in school, but it’s quite important! Maintaining and keeping a good credit score is a good way to build yourself a robust lending backbone.
- Keep that down payment in mind. While making a giant down payment is not at the top of the list, it can make quite the difference. So why not get a savings accounting going with a little down payment in mind? Even a couple of years of saving can take you a long way.
- Find a good real estate agent. Just like finding a lender you trust, you need to find a real estate agent that is an experienced professional. Look for someone that has at least a couple of years of experience in the industry and knows all the ins and outs.
And Before You Make an Offer…
Get the preapproval out of the way. Once you find yourself in good standing, make sure to get a pre-approval before you make an offer. A pre-approval for a loan means that your lender has looked over your finances and decided on a certain amount that you qualify for. A preapproval letter makes you look like a serious buyer in front of any sale. Otherwise, it can be like coming in a little unprepared.
The Importance of Work History
Your work history and current situation are important details when applying for a mortgage. Part of the mortgage process includes the verification of employment. The underwriter of the loan will contact your employer through the phone, fax, or mail to confirm that your employment information is current. One of the things that they might look for is that you have at least two years of history with your employment, depending on what kind of job you have. Changing jobs right before you plan on applying for a mortgage might create a hiccup in the process. The two years is the magic number, so keeping steady employment is a good place to start in finding yourself in a good spot to buy a home.
Factors that might affect this part of the process:
Lenders will look at the kind of employment you have and how you get paid. For example:
- Annual salary
- Hourly
- Overtime
- Commission
- Self-employment
Find the Right Lender That Will Work For You
Here at Rocky Mountain Mortgage, we are ready to help homebuyers of all ages. Millennials are often bogged down with some bad reputation but there are a lot of options out there for young homebuyers looking to make the American Dream work for them. All it takes is a little background information and the right guide through the process. Give us a call today and get the dream started!
