Saturday, September 14, 2019

Making Home Ownership A Reality Takes Sacrifice * $1000 Off your Closing Costs!

We’ve written a lot about how millennials, while being a huge segment of the consumer population set to become homeowners, find it more difficult than past generations to take on this major financial undertaking. From a limited inventory of starter homes to student debt payments monopolizing so much of younger workers' income, both millennials, and their close kin, Gen Xers are having a tough time. It’s no secret that between credit card debt and childcare expenses, many workers in their 30s and 40s feel they are on a treadmill from which they can never step down and lack the funds to take that leap.
If you're a renter looking to become a homeowner, but you're finding it difficult to meet that goal, here are a few tips to help you leave your landlord days behind you.
Saving money is a bugger, but you have to take a long, hard look at your budget. Whether it’s the Starbuck’s run each day, the cable TV plan that has you hooked on premium channels, or those Saturday night drinks with friends, it’s time to get real about sacrifice and making no apologies about it. “Reworking your budget is apt to get you closer to your goal of buying a home, so comb through your expenses line by line and figure out which are less important to you. Then, pledge to reduce or eliminate those spending categories and bank the difference.
Millennials love to use the words “side hustle,” and it comes in handy when planning to be a someday-homeowner. Getting work on the side, however, is more than just a way to conjure up a little extra spending money. While you’re still young and have all that energy, a second gig could help you save some serious cash. It is estimates that among the estimated 44 million U.S. adults who currently have a side hustle, 36% earn over $500 a month from that extra work, eclipsing and adding to the small sacrifices we mentioned earlier.
We know. You love the city. You adore walking to a corner pub or restaurant and being close to work. But the dream of staying there when you become a homeowner is the mostly the smoke rising from a pipe, since that dream won’t be doing you any favors when it comes to saving for a home. Plain and simple, most urban locations are the higher priced real estate spread. The plain and simple truth is that you'll get more for your money in the suburbs than in the city. That down payment you’re saving up will buy you much more than a postage stamp house in a suburb or a nearby town than in your local metro area, and the idea here is to OWN instead of dream about owning. Look for suburbs with convenient public transportation for work commutes.
This is an excellent time to elevate your credit profile and become a summa cum laude consumer. While it won't help you come up with a down payment, it will help you qualify for the best possible mortgage rate available. That means making the prospect of homeownership more affordable on the whole. You can accomplish this in a number of ways, including paying your bills on time, paying down outstanding balances and as a result, altering your credit utilization ratio. All major components of determining your score. And now is the time to go through your credit report to check for errors. “One in five credit reports contains a mistake; correcting yours could send your score into more favorable territory. Know what’s on your credit and fix what’s wrong with it.
The IRS looks kindly on first-time buyers, offering exceptions for tapping your IRA. While it should only be used as a last resort, you have the option to remove up to $10,000 from an existing IRA in order to purchase your first home. Normally, withdrawing funds prior to age 59 and 1/2 would subject you to a 10% penalty, but not when looking to lose your home ownership virginity.
The reason this option is far from ideal, of course, is that any time you remove money from an IRA, it robs you of retirement money. “Furthermore, it's not just that principal amount you're losing out on during your golden years, but the growth it could've achieved over time. So, speak with a financial expert on how, if you decide to do this, you can recoup that money over time.
Homeownership is a badge earned the hard way, but the rewards are great. Get with a mortgage professional like ME, and together you can come up with a game plan that will serve you not just now, but in the future as well. And sooner than you think, you may be on your way to kicking landlords out of your life permanently.
I have a Millennial's Guide To Homebuying eBook over on the right column of this blog, it’s yours FREE! 

You can download it immediately! 

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Roxy Redenbaugh
SR Loan Consultant
Branch Manager
NMLS #269926 ACMC #2225

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