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Mortgage Tips for Millennial Homebuyers

[fa icon="calendar"] Dec 13, 2016 11:54:39 AM / by Eustis Mortgage

Eustis Mortgage

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According to Fannie Mae’s latest National Housing Survey, 93 percent of millennials aged 25 to 34 hope to buy a home in the near future. This means more first-time homebuyers are preparing themselves to enter the housing market; but with such a clear demand for homeownership, why haven’t they yet switched from renting to buying?

Many millennials report that the mortgage process can seem daunting—but it really shouldn’t be! Check out our list of tips to making the mortgage process as easy as possible.

  1. Guard Your Credit Score: Lenders want to see that you have a history of paying debts back on time and consistently. So lenders will definitely check out your credit report and see if you meet their lending criteria. Any factors that could potentially lower your credit score should be avoided.
  1. Don’t use cash: It is often very difficult for lenders to source cash, so when you deposit it, lenders can’t be sure where it came from. This can make them uneasy. You should also avoid moving money frequently between accounts as it may raise a red flag for your lender.
  1. Down Payments- They don’t have to be 20 percent: There’s a common myth that down payments need to be at least 20 percent; however, loan programs differ and thus require different down payments. In some cases your down payment could be as low as 3 percent. There are also some programs that let you borrow 100 percent of the price. Don’t lose hope; the right program is out there for you.
  1. Have a 2-year work history: Lenders look for a solid work history. At least a 2-year work history with the same company is ideal, but not necessary to be qualified for a mortgage.  For example, if you change companies but stay in the same industry, that’s also acceptable. In addition, if you happen to advance in your field and garner more benefits, lenders see that in a positive light. If your routine constantly changes, however, like moving from salary to commission, then that can be seen as an issue.
  1. Know your buying power: Always get pre approved. This means the lender has reviewed your financial documents and understands what kind of home you can afford. This lets you know the price range you should be looking at and gives you more leverage when you finally go in to get your actual mortgage.
  1. Understand your mortgage payment: Monthly mortgage payments are more than just your principal and interest expenses. It also includes your real estate taxes and insurance. The real estate taxes and homeowners insurance go into your escrow account, so when those payments are due, the lender makes the payments on your behalf.

Using these six mortgage tips, the mortgage process is bound to be simple and easy for any millennial homebuyer. For more information on home financing, contact one of our mortgage specialists today.

Topics: mortgage news, housing market, first-time homebuyers, millennial homebuyers

Eustis Mortgage

Written by Eustis Mortgage

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