5 Millennial “Roadblocks” to Homeownership

Many Millennials associate homeownership primarily with responsibilities, commitments, and expenses galore that we just aren’t ready to take on. Below are some common “roadblocks” we put in front of ourselves in our pursuit of homeownership and some tips for how we might unblock the road to homeownership sooner.

ROADBLOCK #1: “I don’t have the money for a down payment on a house; I need to save up first!”

The federal government encourages homeownership and offers programs that allow you to put as little as 0-3.5% down on a home! The most common % down offering for first time homebuyers is a Federal Housing Administration (FHA) loan that asks for 3.5% down.

0% down payment programs are for veterans (VA) and rural developments (USDA). The VA loan program is insured by the Veteran’s Administration, and the USDA loan program is insured by the US Department of Agriculture. You would be pleasantly surprised to see what areas are “rural development” and qualify for USDA loans. In fact, some of the hottest communities in town are USDA eligible. There are also local community programs offering down payment assistance, property tax discounts/credits, and special bonds for first-time homebuyers like the Mueller Development.

Also, how much house you can buy is minimized as mortgage interest rates slowly tick up from a historical low.

ROADBLOCK #2: “I can’t afford a mortgage! Plus, having a mortgage sounds way too grown up.”

On the contrary – it is commonly said that everyone is paying a mortgage. You are either you’re paying your own, or you’re paying your landlord’s.

Do you pay for rent every month? Or even better, do you actually know what you can afford to pay for housing on a monthly basis? Many of us currently pay rent each month without a true understanding of what we could or should be spending. In fact, sometimes paying a mortgage is actually cheaper, after tax, than paying rent!

Benefits like income tax breaks and annual rising property values that allow for equity to be built (very quickly) are all available to homeowners and not to renters. Do yourself a favor and ask me to connect you to a mortgage lender that can help explain what your buying power looks like right now. It will be 30 minutes well spent. If anything, a lender will give you homework on what you can do to increase your buying power for future homeownership.

ROADBLOCK #3: “I’m not ready for the commitment. I don’t know how long I will be here…”

The flexibility of renting in a definite plus for those that are not ready to commit to a specific city, but you should still consider consulting your real estate agent about property that would rent and cash flow well. Owning will afford you the option of selling or keeping the property as an investment if you move. Austin has recently been named the Number One city  in the country to live by multiple news sources. Not a bad place to make an investment!

ROADBLOCK #4: “I can’t afford to live in the areas I want to live in.”

I, myself, have maintained this objection for a long time. However, if you stop throwing your money away every month, you will have the money faster to live in exactly the area in which you want to live. Your real estate agent should be able to help you find an area that embodies the lifestyle you are you envision for yourself

Of Note: your realtor doesn’t cost you anything on the buying side. They are paid by the seller to solely represent YOU.

ROADBLOCK #5: “It’s too much work with all the maintenance and responsibility.”

Of course, there is more work involved in maintaining a home that you own. However, there are options in Austin like condos, smaller footprint homes, and townhomes that would not require as much maintenance if that is a concern.

I’d love to be a resource for first-time homebuyers and millennials in Austin. As you can see, these “roadblocks” are not as insurmountable as they seem. Please give me a call, text, or email to talk about your options. There are no silly questions!