Young people are struggling when it comes to home ownership, which comes as no surprise when we see that the costs of houses have almost tripled over 20 years, whereas the average salary of young adults has not even increased by one fifth. Are manageable mortgages out of reach for millennials? Is even qualifying for one out of the question?
Clawing your way onto the property ladder may be a tough journey, but us millennials can still make it.
Calculate before you Quit
Use tools like mortgage broker habito.com to help you calculate what kind of home you can afford. This is an important factor to know before searching above your bracket and falling in love with something that would financially cripple you. It can also help you see that perhaps with a longer mortgage term or some thrifty deposit management, you can afford to buy after all. You may even find that in comparison to your rent, taking out a mortgage is the better option which actually earns you equity.
Unfortunately not everyone is blessed with a good credit score or can scrape together enough cash for a deposit, and even working on your credit history or following the thriftiest of money tips might not get you all the way.
Rent To Own Schemes
One way to help you save the money you need is to take advantage of a range of government Help to Buy schemes in the UK or slightly more complicated Rent to Own schemes in the US, which can help bridge the financial gap between renting and home-ownership.
The upside of Rent to Buy, or Shared Ownership schemes, is that often, the rent you put towards staying in that property isn’t just going in the landlords pocket, it’s adding to a share of the property that will become yours. In the US versions of these schemes, you pay a lower rent which reduces pressure enabling you to save money to buy and work on your credit score over these years to better qualify for a mortgage down the line.
Depending whether you choose Lease-Option or Lease-Purchase, you may be obliged to buy at the end of the period and face difficulties if you still can’t afford it. Check out these tips on whether a Rent to Own scheme could be right for you , the key to always pay close attention to the details of the contract.
Get The Best Support
Whichever routes you go down to land yourself with a home, you’ll want a good estate agent at your side. A good realtor will be able to help you with the legal jargon, find you the best suited properties available and give you stellar advice when it comes to your financial options. That’s the kind of support you need as a fist time buyer, so do the research and get someone you ca trust and who will take care of you throughout the whole process.
