Millennials Are Ready to Buy Their First Homes, but Challenges Await
There is a new wave of first time homebuyers looming just around the corner. This time, it’s the Millennials that are leading the pack. However, it’s not all good news. In fact, the Millennials are facing a tough challenges. So what are these challenges? If you are a millennial yourself and want to find a solution to such possible problems, then this article is for you.
“Become the kind of leader that people would follow voluntarily; even if you had no title or position.” ~ Brian Tracy
The Need
According to the National Association Of Realtors, the Millennials are among the serious first time homebuyers recently. The age range of 25 to 35 years old represent as one of the biggest segments for hungry homebuyers. There is a need for the market to accommodate such demand.
However, the most of the Millennials are hitting into problems when it comes to purchasing their first home. The biggest hurdle is struggling to qualify for a mortgage.
The Problem
According to the report, 60% who are failing to qualify for a mortgage are first-time Millennial buyers. In fact, some of them were already on the market for a year, trying to qualify for a loan.
If you look at it at the surface, you may think that qualifying for the loan is the problem. But in reality, the real problem is the credit score. Since the credit score is the biggest reason why most banks and loan company deny mortgage application, then it only makes sense that you should prioritize improving your credit score.
The Solution
For easy approval, better terms and better rates, a good credit score is a must. Fortunately, credit score is something that you can raise through consistent effort. So the next logical question would be – how do I raise my credit score?
There are a couple of ways you can improve your credit score, but this article is going to list a few key important ones:
* Be Responsible – before you do any of the credit improving tactics, there is one thing that you should address before anything else. What this article is talking about is your financial state. You must be financially responsible.
For most people, financial irresponsibility is the root cause of the low credit score problem. Therefore, it would do you good to start working on it.
* Pay Your Bills On Time – not just pay your bills, but pay them on time. This should be a fundamental rule, but you will be surprised how many people make the mistake of paying their bills late. Having missed a bill payment may reduce your score by as much as 50 points.
* Keep Your Balances Low – what the lenders want to see is that you are using your credit responsibly. Meaning, they don’t want to see your credit limits maxxed out. Try to keep your credit usage to 20% – 30% at the very least.
However, don’t bring your credit usage to zero! Having no credit usage means no credit records, which is just as bad as having a low credit score.
Summary
The housing market is about to meet new faces, specifically the Millennials. However, it’s not all good news as most Millennials are having problems getting approved for mortgage and the biggest hurdle is the low credit rating. If this sounds like you, start improving your credit score now. You can start by being financially responsible, paying your bills on time and keep your credit usage low.