Millennials Flock Towards Low Down Payment Programs- At least mine has.
This is a very relevant post to us. Just this past month, one of my millennial son's who prefers when I don't use him and his life as text book real estate fodder, wrote an offer on his very first place. Let me explain. Just this past May, this particular "millennial" graduated from Grad school with a masters degree in....well I can't tell you because then you might know who I'm speaking of (wink wink). Let's just say he is working in a related field to mine but he would never admit it. Anyway, he moved back to the family home after being away at school during the school year for 7 years. Rough for him no doubt but rough on us, the parents who got use to having the doors locked and lights turned out by 9 pm so we can go up to our bedroom to watch our recorded episodes of Blue Bloods and Ray Donovan and doze off by 10 pm. Anyway, I could certainly see the noose tightening around him and he more and more pushed back at hanging out with the "P's".
So off we went to see my friend and colleague, David Tomczak from Prime Lending. There he explained the loan process to him and what his options were, even with the student loans he will pay off for the rest of his life. We scoured the area for inexpensive 1st floor condos with reasonable association fees. When we found one we pounced on it. It needs a ton of work but nothing he and we can't handle. So, we negotiated... 5 % down with a closing cost credit. At the end of the day, this millennial should end up with a place to live in a nice area for way less than rent would be if he moved in with his High School buddy. So fingers crossed, it all works the way it should.
A report released by Down Payment Resource shows that 61% of first-time homebuyers purchased their homes with a down payment of 6% or less.
The trend continued among all buyers with a mortgage, as 73% made a down payment of less than 20%.
An article by Chase points to a new wave of millennial homebuyers:
“We teamed up with Google to help us better understand what customers are searching for and how the home buying landscape is evolving. We found that millennials and first-time homebuyers are making a big splash in the market, and affordability remains top of mind.”
Among millennials who purchased homes, David Norris, Loan Depot’s Head of Retail Lending, said:
“It’s clear from the survey results that Millennials have a lot of anxiety built up about the home buying process.
There is good news, however, as there’s more flexibility than most Millennials think regarding how to qualify for a loan and what’s needed for a down payment.”
Bottom Line
If you are one of the many millennials who is debating a home purchase this year, let’s get together to help you understand your options and set you on the path to preapproval....I'll fill you in on the latest episode of Blue Bloods and tell you how my millennial is doing.