Millennials Can’t Buy Homes? Learn the Truth About These 4 Millennial Myths
It’s a fact that millennials don’t have as many advantages as the generations that came before them, and because of this, many millennials don’t think that they can ever own a Golden CO home due to the price and many other factors, but this just isn’t true. In fact, there are many myths surrounding millennials that dissuade them from even looking into homeownership that are completely false. Here’s the truth about some of the biggest millennial home buying myths and why they’re wrong.
Myth #1: Student Loans Keep Millennials From Buying Homes
Student loans debt is at an all-time high, and the national average in 2019 is $29,800 per student, and before graduates even have a job, they’re forced to figure out how to make their student loan payments. Because of this, many millennials think that they can’t possibly own a home when they’re already coming out of college with so much debt. However, this isn’t necessarily true. As long as the person in question has the money to make all their monthly payments, there’s no limit to the number of loans they’re allowed to take out. Of course, all people, millennial or otherwise, should be responsible about how many loans they have, but in this case, student loans do not stop millennials from purchasing a home.
Myth #2: Down Payments Must Be 20%
When purchasing a home, the buyer will need to supply a down payment, and most sources will tell them that this down payment must be 20% of the home’s total value. And for a starter home valued at just $100,000, a $20,000 down payment can seem impossible—especially for a buyer who has nearly $30,000 of student debt. However, there are different loans that allow buyers to have a down payment as low as 3%, which for the hypothetical home mentioned previously, is a $17,000 difference. A common loan for first-time home buyers to use is the FHA loan, which is sponsored by the government instead of a normal lender like other traditional loans.
Myth #3: Renting Is Cheaper Than Owning
It’s easy to think that renting an apartment is less expensive than purchasing a home. After all, apartments don’t require any sort of down payment or mortgage, while purchasing a home do require those things. However, while it may be hard to believe, in many states across the country, buying a home is actually less expensive than renting an apartment. The only exceptions are typically in large, busy cities like New York City and Los Angeles or in rural areas. When moving to an area, be sure to do research on the cost difference between buying and renting, because the results may be surprising.
Myth #4: Millennials Need to be Married to Buy a Home
No matter what, buying a home is a big decision that costs a lot of money. A lot of millennials think that because of this, it’s impossible to buy a home on just one income alone, and in order to ever have a shot at being a homeowner, they need to be married and have access to both incomes. However, this isn’t true. It will depend on the cost of the home in question, but as long as the buyer can afford a down payment and the monthly mortgage payments (which are fairly easy to calculate), they don’t need to feel like they need to rush into marriage just to buy a home.
Myths like these prevent millennials from thinking they can buy a home when it’s actually within their reach, and knowing the truth can help them become homeowners sooner rather than later.