Millennials Unable to Buy Homes Due to Misinformation

Millennials Unable to Buy Homes Due to Misinformation - Texas Trust Home Loans

One of the top missions of Texas Trust is to educate customers regarding the mortgage home loan process. We focus on millennials because a vast majority of them have met the requirements for acquiring a mortgage, but they fail to get one due to misinformation. We understand that the majority of millennials set homeownership as a goal in their life. However, unfortunately, most millennials don’t know how a mortgage works, as per the report of Bank of America.

Interestingly, homeownership was the top priority of 72 percent of millennials aged between 23 and 40 years, as per the recent survey. According to the 2018 Fall Homebuyer Insight Report, it was due to misinformation that the majority of the millennials did not make the switch from tenancy to homeownership. Those millennials possessed wrong information about the cost of buying a house. Additionally, they also struggled to understand the qualification criteria for homeownership fully.

Texas Trust has found that the millennials are struggling to become homeowners owing to the preconceived notions about the requirements of homeownership. Most millennials are giving up on their dreams due to lack of knowledge. We are always ready to provide information and assistance to our customers regarding the mortgage process. Majority of our customers rely on our website www.texastrustloans.com to gain knowledge, and you can do the same.

According to a report published recently, senior vice president of Bank of America’s homeownership solutions and affordable housing programs highlighted the top misconceptions, tenants:

  • A vast majority (49 percent) of millennial renters believed that putting down 20 percent of the down payment was compulsory to buy a home. However, the truth is that you can acquire a mortgage by putting as low as 3 percent down payment at Texas Trust.  
  • The misconception about private mortgage insurance (PMI) among millennials was also rife. About 43 percent of the millennials had the wrong conception about PMI. They thought they would have to pay PMI even after putting 20 percent down payment.
  • Millennials also incorrectly believed that “perfect” credit score was mandatory to be considered for a mortgage. However, Texas Trust Home Loans considers a 620 credit score or above for its conventional loans and 580 credit score or above for the Federal Housing Administration (FHA) loans.

Twisted facts about mortgage terms and conditions

According to the National Association of Realtors, nearly 49 percent of non-cash buyers had put down 20 percent or more down payments in August 2018. The percentage of homebuyers, who paid upfront payment a fifth or more of their purchase price stood at 27 percent, during the same year.

We provide a variety of loans to our customers based on their needs and monetary situation. We even have loan options where you can enjoy enormous benefits if you don’t put a 20 percent down payment.

We want to ensure that you have a smooth transition from tenancy to homeownership. We recommend that you opt for the loan option where you don’t use up all your savings for the down payment. The saving cushion will help you in covering your property tax, property maintenance, and other unexpected expenditures.

As mentioned above, our conventional mortgages can be acquired for as little as 3 percent down payment. You can indeed avoid monthly payment of private mortgage insurance if you are putting down 20 percent.

We understand that some buyers can secure better deals coupled with lower interest rates due to higher credit scores. However, it would be best if you did not get an impression that homebuying is an exclusive privilege of customers with a perfect credit score. As mentioned above, we offer conventional loans to customers, who have credit scores equal to or above 620. While people having a credit score similar to or above 580 can qualify for FHA loans.

We understand that homeownership has become a priority for millennials. That is why it has become our mission to help millennials, who can’t purchase a home due to misinformation or misconception. We believe millennials are the part of our mortgage family and we will leave no stone unturned in ensuring that they achieve their goals.

How to remove hurdles

Millennials faced financing as the top issue apart from misinformation to become homeowners as per the report of Bank of America. However, we offer to finance at affordable rates which can fulfill your dream.   

The report said that down payment remained a burning issue for forty-four percent of respondents. About 23 percent of respondents said that buying a dream home was out of their affordability. Keeping in view the needs of our customers, we started our financing from as low as a 3 percent down payment.

The report found that millennials had faced difficulties in saving up to buy homes. The report further added that 48 percent of renters were contributing 30 percent of their income towards rent. We wanted millennials to fulfill their dreams of becoming homeowners, and that was why we were ready to provide you monthly loan payments, which would match your rent. Instead of paying rent, you could use the same amount of money to pay the monthly mortgage payment of your future home.   

The recent analysis of federal data by the National Association of Home Builders showed that the number of millennials living with their parents was increasing. These millennials lived with their parents as they couldn’t afford their own homes. According to an analysis by the Urban Institute, the rising house prices, student debt, delayed marriage, and excessive expenditures of city life were the barriers faced by young adults.  

We firmly believe that you should identify your needs as early as you can because this will help you in the long run. You must decide your budget now so that rising house prices do not mar your plan.  

If you don’t know how to evaluate your financial situation, then you can always contact us. We will evaluate your monetary situation and identify your needs at the same time. We promise your overall situation will improve once you have gone through our consultancy process.  

Please visit our website today at www.texastrustloans.com or call us on (888) 971-1425 or (214) 245-3929.

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