DID YOU KNOW THAT MILLENNIALS (BORN BETWEEN 1981 AND 1997) ARE LESS LIKELY TO BE HOMEOWNERS THAN BABY BOOMERS AND GEN XERS?
How is it that Millennials, the largest generation in US history, seem to be unable to afford to buy their own home?
According to the Urban Institute, 53% of millennials say that they don’t think they can afford a down payment to buy a home.
Here’s the thing that most millennials don’t know, a potential home buyer does not need a large amount for a down payment.
You should know that in all actuality, you can find a 12 percent down payment at most agency mortgage companies and Federal Housing Administration (FHA) loans can be as low as 5 percent or less!
Of course, only you can decide if you’re emotionally ready for homeownership, however there are plenty of potential financial benefits, if you are ready.
You should also care if you are a parent or grandparent to a millennial because you can let them know - IT'S POSSIBLE to buy their own home, probably, like you did!
Now that you know a down payment to own your own home is within reach, let’s talk about what you can do to buy your own home by 35 (or in 15 years).
This is how much you need to save per month for various down payment amounts to buy your first home by 35 years old.
The calculations below assume a 5 percent rate of return (Federal Housing Administration (FHA) loans can be as low as 5 percent or less! ) on investments and a price of $275,000 (the median home price in the U.S. as of February 2019).
CNBC helps us crunch our numbers.
Since these figures only cover the down payment, it's likely that you'll need a bit more for closing costs, insurance, taxes, and actual moving expenses.
This is a great place to start! Having a great financial friend and a trusted realtor in your life will be a huge help as you prepare for a future of home ownership.
You can buy a home and save for a down payment in 15 years or less.
You can start early and get a head start or start exactly where you are right now. The latter will just require a little more intentionality and focus.
You can download the home buyer calculator for future use and share with your friends and family.
The good news is you’ve got a #FinancialFriend to help walk you through it! When you're ready, set up an appointment to discuss your home buying thoughts with Michael.