Date Posted: March 16, 2017
With today's tougher mortgage qualification rules, the dream of home ownership is slipping away for some millennials grappling with high debt loads.
Most economists will agree that a huge problem millennials (and not only them!) face is how easy it is to borrow money today. Credit cards, auto & payday loans are just a quick application away! The lack of financial education is laying the groundwork for a troublesome financial future.
Not only are millennials racking up a lot of debt, but they are also reporting to have the smallest emergency funds available to them.
It has become a common occurrence for millennials to have thousands of dollars in credit card debt, student loans and a brand new car loan by the time they are ready to buy a home. Many millennials will be left disappointed when they are told they cannot qualify the a mortgage amount they were hoping for, which forces them to either purchase a smaller home, or rent. Committing to a high financial obligation such as a mortgage or rent will also reduce their monthly cash flow, limiting how much money they can utilize to pay off their debt.
The social stigma of moving back in with your parents is forcing younger potential home buyers into committing to a financial obligation they may not be financially ready for. Living with your parents for an additional year while focusing on paying off your debt could help reduce years of making smaller payments while having to maintain a mortgage or rent payment.
Are you looking to purchase a home in the near future? Speak with one of our mortgage brokers today to find out how you can improve your financial situation in order to strengthen your financial position!