Over half of the millennial generation feel that finances are the biggest obstacle of homeownership. However, the most common misconception young buyers have is the amount of money required for a down payment. While the 20% down payment is still ideal, there are several options out there that require as little as 0-3% down, including state and local down payment assistance programs.
Many young adults feel burdened by student debt, but if you are serious about becoming a homeowner, you can implement a savings plan to help bring down your debt-to-income ratio (DTI). The DTI compares the amount of debt you carry to the amount of income you earn. This number should be under 40% to qualify for a mortgage, so that is what your ultimate goal will need to be when determining a savings plan.
The bottom line is that you shouldn’t be afraid of homeownership. Yes, it is a big commitment, but when you look at the financial advantages such as the opportunity to build equity, as well as all the tax deduction benefits, it starts to make sense.
Please call me for a no obligation mortgage consultation today. I would be happy to discuss your finances with you to determine if you’re ready to get out of the high priced rental market.