Older generations see millennials as lazy and entitled individuals because the younger generation does not immediately move out of their parent’s homes. But this assessment is far from the truth because this age group carries the burden of a massive student loan. According to CNBC, the collective student debt amounts to $1.73 trillion.
This crippling responsibility forces millennials to take practical measures that older generations consider unacceptable. But it also tells us that this age group is taking bold moves to ensure their future. According to the Wall Street Journal, this generation values their education more than previous age groups.
If you are a millennial, it may be time for you to take another leap of faith. The pandemic forced banks and other lending institutions to lower their borrowing rates. With that said, it is an excellent time for you to undertake a mortgage.
With your enormous financial responsibility brought about by your student loan, you might be hesitant to take out another debt. Your reluctance might also stem from the other fees associated with home loans. If this is the case, this article will clear out your doubts about monetary obligations related to housing loans.
Deposit
Generally, sellers expect a 20 percent down payment. But coming up with such a substantial amount is quite challenging, especially with our monthly obligations. It becomes even more troublesome if you decide to invest in a prime location.
Thankfully, the government paved the way for buyers to avail low down payment options. It is now offering FHA or VA loans that allow you to pay as little as 3.5 percent or 0 percent! This option provides more flexibility concerning your mortgage.
Closing Costs
Closing costs usually include origination fees, credit report fees, appraisal fees, application fees, title insurance, and title search fees. But it could also cover other expenses.
It varies from one lender to another and the price of the property. But you can have a good idea of the amount by multiplying your home’s purchase price by 2-5 percent. Let us say that your new house costs $300,000. It means that the closing cost would amount to $6,000 to $15,000.
Home Inspection
Most financial institutions that offer mortgages would require this. It may cost you $300 to $500. But this will save you from costly repairs brought about by hidden structural problems.
Property Taxes
Property tax heavily relies on the value of the property and the location of your new home. A rural community might have lower tax rates than a neighborhood near the city’s heart. Typically, assessors would appraise the property taxes every one to five years.
Homeowner’s Insurance
This expense protects you from unforeseen calamities such as fire, earthquake and flooding. Some policies even extend coverage in case someone in the household gets hurt. But please note that this insurance is different from the policy included in your mortgage.
Conclusion
Millennials do not often get the credit they deserve. They take calculated risks to make a better future for themselves. Older generations may not completely understand the steps that millennials take. But we should not condemn them for their daring move.
If you are a millennial ready to take your next financial responsibility, you do not have to look elsewhere. When it comes to applying for a home loan and mortgage in Colorado Springs, Total Lending Concept has your back. We understand the different factors in play when buying your first property, so we try to make it easy for you. You can learn more about home loans by calling us now!
