Millennials Seek Parent’s Help
Buying a home requires saving up a down payment – something many millennials are struggling with.
Many millennials are finding that finances are the biggest obstacles to home ownership. According to Trulia, about half of millennials that are looking to purchase a home need parent help.
The reasons behind millennials needing parent help? Debt, poor credit and a lack of savings. These are the chief reasons behind the struggle for millennials to come up with a down payment on their own.
It can be intimidating to buy a home for many first time homebuyers. With millennials turning to mom and dad to help come up with a down payment, there can be tension between family.
According to Trulia real estate expert, Michael Corbett, millennials should, “write up a contract and determine what is best for monthly payments. This will and can avoid money woes among family members.” Basically, treat the down payment that the bank of mom and dad loaned you as exactly that – a loan.
Not everyone has the option to turn to mom and dad for a loan though. The study found that 37 percent of millennials looking to buy a home plan to work a second job, while 22 percent said they would use state or federal programs to help them make ends meet for their home purchase.
What’s unique about millennials is that many of them refuse to give up luxury items in exchange to save for a down payment. 65 percent of millennials said they wouldn’t give up their cars, making the argument of having transportation.
Additional Items Millennials Refuse to Give Up:
• Netflix subscriptions.
• Eating Out/Takeout.
• Clothes shopping.
• Organic shopping.
• Gym membership.
• A morning latte or cappuccino.
According to the Trulia study, 68 percent of millennials are looking to purchase a home under $200,000. Many don’t know how much money they will need for a down payment, and those that do have an idea only plan to put down less than 10 percent. This makes getting approved for a mortgage more difficult. The real goal for a down payment should be around 20 percent.
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