3 Home Buying Myths Debunked For Millennials

There are a lot of different myths revolving around millennials. Everyone has heard them: they’re exaggerated, poorly structured, and sometimes, completely inaccurate. For instance, buying avocados and buying a home are not mutually exclusive, and people can enjoy both. Everyone deserves the same chance and opportunity to be a Griesbach homeowner, and some suspicious myths shouldn’t keep anyone from taking the first steps to attaining their dreams. Here are three different myths being passed around about millennials purchasing homes and why they are re inaccurate.

For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.

Myth #1: Student Debt Keeps Millennials From Buying Homes

While it is true that student debt is a huge problem that many millennials struggle with, with the average student owing close to $27,000 in student loans after graduating, it actually does not affect a person’s ability to purchase a home. Millennials may think that just because they already have student loans, they are no longer qualified to also have a mortgage, so they’re stuck thinking they have to choose between either an apartment or with their parents until they can save up the money to move out. However, the number of loans one takes out is only restricted by income. So long as a person’s debt-to-income ratio remains within the permissible percentage allowed by banks, Millennials may purchase whatever they want.

Myth #2: Millennials Prefer Apartments Because They’re Cheaper

It’s a fact that the majority of millennials opt for apartments over any other type of home available on the market. But why is that? It’s because of the common misconception that paying monthly rent for an apartment is actually cheaper than paying a monthly mortgage. In reality, a mortgage can be the same price or cheaper than renting an apartment. Home costs will depend largely on the location of the home, so it’s important for millennial home buyers to either consult a real estate agent who knows the area that they’d like to purchase in well or use a specialized calculator to make sure they are making the most informed choice possible.

When looking for a new home, millennials should look at the prices in their area to make sure they’re getting the best deal for their money. What they think is the cheapest option might actually be more expensive.

Myth #3: The 20% Down Payment Prevents Millennials From Buying Homes

A big misconception that keeps many millennials from thinking they can purchase a home is that they must have a 20% down payment in order to qualify for a Canadian mortgage. A 20% down payment is a lot of money to have. Even for a home that costs $100,000, the buyer needs to have $20,000 cash, which can be unviable for many millennials. However, many millennials don’t realize that the 20% down payment isn’t mandatory, and they can instead pay just 5% down. This change was made official in 2016 for homes with a value of $500,000 or less. For the previously mentioned $100,000 home, that cuts the down payment down from $20,000 to just $5,000, which can be far more reasonable for many millennials trying to buy their first home.

These three myths can keep a lot of millennials from believing they can be homeowners, even when it’s well-within grasp. Millennials interested in buying their first home should look into the home-buying process and speak with a real estate agent for more information.

For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.