Anyone who’s already ventured in the real estate market can attest that home-buying can be a tricky investment. There are lots of things you will need to take into consideration when buying a house. This includes your needs, your budget, your wants, and the location, among many others. This makes real estate investing intimidating to new home buyers, especially millennials. They have many questions running in their mind that stops them from deciding to finally buy their first home.
What if I Can’t Handle Home Maintenance?
Millennials who bought fixer-upper homes learned too late that home maintenance and repairs are inevitable. But the costs are not the only thing that stops millennials from buying houses. It is also the fact that many people lack home maintenance skills. They are afraid to admit that they would probably need to ask someone for help in changing light bulbs and in fixing a squeaky door. Some are not even ready to tell their friends they pay a plumber to check on their water heaters.
If this sounds like your dilemma, know that you are not alone. Not all homeowners know every single maintenance tasks one can safely tackle. There is no shame in asking for help to maintain the house. You can also find endless resources online that help first-time homeowners like you DIY some maintenance and repairs.
What if I Can’t Find a House I Can Afford?
Many Gen-Yers fear they can’t find a house that fits their budget. Many are paid less than what Baby Boomers got when they were of the same age. Their massive student debt also hinders them from even thinking about buying a house soon. When it comes to mortgages, your monthly mortgage should not be more than 25% of your gross income each month. This means if there is a gap between your income level and property values, then you can’t afford the monthly payments.
You can choose to pay your debts first before you buy a house. This way, you can slowly but surely build your credit score while you reduce your debt. Another smart solution is to save for a down payment while you reduce your debts. It will take some sacrifices, but you can make it work. You will need to find more than a single source of income to add to your savings and down payment.
What if I Don’t Get Approved for a Mortgage?
Some millennials fear they will be rejected by a mortgage lender because of their current debt and low credit score. Not only is a mortgage rejection inconvenient. It can also be frustrating.
Know that there can be different reasons why a lender will refuse a mortgage application. You might not have enough income, credit score is too low, or maybe you were not honest in your application form. You can always ask your lender why you got rejected for a mortgage, and they can also help you understand what you can do so you won’t fail the next time around. There might be a need for you to pay a larger down payment, show them you can afford to pay your monthly mortgage, or pay attention and apply with care on your next application.
What Can’t I Save Enough Money for the Down Payment?
There are millennial homebuyers who can’t afford the 20% down payment. They know that putting down a substantial down payment will get them better loan terms and interest rates. But what if all they can afford is the monthly mortgage and other costs except the down payment?
The good news is, home loans are more affordable, and lenders are a lot more forgiving these days. There are low-down-payment mortgages you can consider, which asks for a small down payment amount and have easier qualifications. You can tap on incentives for first-time homebuyers. You can also take advantage of low down payment assistance programs for first-time homeowners like you.
Did you know that you can also ask your family for help regarding your future home’s down payment? There are home loans that allow down payments to be gifts. You can also find yourself a guarantor or co-signer. This can be a relative willing to vouch for you in case you fail to pay your dues. They can either use their own property or create a special savings account as security for the mortgage.
A home purchase can be a life-changing decision. You might have many what-ifs that are holding you back from buying a house. The good news is, you can always find a way to fight your fears. Instead of living in fear, choose to overcome them, and soon you’ll be a proud owner of your first home.