If you’re a millennial, you’re likely looking at the housing marketing thinking it’s a good time to invest in a home. But you’re wondering… how do other millennials save for a home? From side hustles to cash gifts, here are 4 ways millennials are saving for a home in 2018.
How Millennials Are Saving for a Home
Often times, the most difficult part about purchasing a home for first time millennial home buyers is coming up with the cash for the down payment. The obstacles faced with the down payment are due to the current economic climate coupled with debt acquired through student loans and higher costs of living. If you feel comfortable with the monthly mortgage amount, but are struggling with the upfront cost of the down payment, requesting a cash gift from a family member is a common way to cover the upfront cost. You are allowed up to $14,000 a year per gifter, which may cover a significant portion of your down payment.
Many millennials have more than one job to sustain a comfortable lifestyle and house payment. Jobs such as Uber, mowing lawns, walking dogs, etc. are good ways to supplement your mortgage every month. A steady way to keep track of your side hustle earnings is to dedicate it to a certain bill. For example, if your electricity bill every month is $150-$200 and that’s about what you make mowing lawns, then dedicate those earnings to that bill. This way you can make sure that it gets paid every month. Side hustles are one of the top ways millennials are saving for a home.
Buy with a co-signer
The largest rising trend is to kick traditional living to the curb by spitting the purchase of a new home with friends or roommates. However, you must be sure that you’re all committed to the home, making sure that all bills and maintenance fees are covered when they arise. The last thing you want is for one of your co-signers to forget to pay the mortgage and your credit gets dinged because of it. The perks of splitting a mortgage is that you’re building equity while paying a lower monthly mortgage. This is one of the most popular ways millennials are saving for a home.
Look into different loan options
Gone are the days where a 620 credit score and a 20% down payment are required to get a mortgage. Now with loan types such as FHA loans, home buyers are able to qualify for a loan with as low as a 580 credit score and as little as 3.5% down at signing. This alone is opening the possibility of home ownership to more and more millennials than ever before.
You may also like: Reasons Millennials Choose to Buy a Home.