The millennial generation is known for their enthusiasm, and for their prowess at researching and consuming content. This, however, has not prevented them from becoming victims of myths, especially when it comes to home buying.
This post will highlight a few myths regarding millennials and their home buying process.
Myths on Millennial Home buying process
Following are the six persistent myths on the millennial home buying process. Let’s sift fact from myth:
1. Pre-Qualification & Pre-approval are same
Often people assume that both terms are interlinked with each other, but they’re totally different. Prequalification is verbal, pre-approved is documented. When you get pre-qualified, you give your lender the basic information about credit card and other banking accounts verbally and gain a verbal estimate for a loan. Whereas, with pre-approval, your lender takes a thorough overview into your documentation in order to assess your situation before pre-approving you.
2. All Agents Are the Same
When it comes to taking real estate agent guidance on home buying, we often hear they’re only concerned with their commission. But in actuality, they are not. Some agents are very dedicating and loyal to their clients, highly experienced, and are committed to exploring the best opportunities for their clients. Your agent is a resource and most likely knows the neighborhoods and surrounding areas to the property you are considering.
3. Your Income Determines How Much You Can Borrow
It is believed that the amount of money you can spend on a home only depends on your income. The simplest and the most effective way of increasing your borrowing amount is to save ahead of a purchase. These savings will come in handy as you always may have expenses that are not part of the buying process and, as often happens, you will want to purchase items for the house too. Nowadays, many lenders give multiple loan offers to pick from.
4. Millennial Can’t Get a Home Loan
Many people believe that millennial can’t get a home loan, due to numerous factors affecting an applicant’s ability to secure a loan. The fact is, if you battle with meeting your month-to-month payments your financial assessment can be affected but there are programs to get you back on track. Plan to talk with a home loan officer as soon as possible.
5. It’s Cheaper to Rent than Buy
Another common myth is that renting a house is better than buying it. Not at all! The status quo of the market says that rent prices are increasing faster than purchase prices, thus, it’s better to choose to spend money on a personal asset as an investment than paying monthly to your landlord.
6. A close home Inspection Means No Repairs
Another misconception that has seeped into the mindset of many millennial is that a proper home inspection means there will be no need to repair. This is a big mistake, and you should never commit to buying a house just because the seller has had an inspection.
Before you buy be sure to talk to the experts to get the answers you need to make an informed decision. Realtors know the housing stock and market. Lenders show you what you can afford and how much it will cost you to finance a home. Inspections are important to get a good assessment of the home and potentially needed repairs or updates needed in the near future