How St. Louis Millennials Can Increase Their Buying Power
St. Louis millennials are finally deciding to take the leap into home ownership. This is the first year that they are expected to be the majority of the buying market. While many people speculated that the reason they weren’t buying is because they were lazy or didn’t care, the real reason is much different: buying power.
Many St. Louis millennials have a significant amount of student loan debt which makes it harder for them to take on a mortgage or even want to take on additional debt. Millennials also watched the crash of the housing market which made it not as appealing to want to purchase a St. Louis house.
But, as the interest has been increasing here are some ways to increase your buying power as a millennial.
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Focus on your down payment
Having a large down payment can help your ability to buy a St. Louis house and score a favorable interest rate as well. If you can make a 20 percent down payment you won’t need to pay for Private Mortgage Insurance which will save you money every month.
To start building your down payment focus on paying yourself first. When you get your paycheck have some of the money automatically transferred to your savings account and then learn how to live off the balance.
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Lower your expenses
There are many ways that you can lower your expenses so you can build up your savings faster. Some popular options include moving back home for a short time while you save on not paying rent, getting a roommate to split the rent, or reducing your spending habits. Learn to resist going out to eat, hitting Starbucks for coffee, and buying the new car until after you are in your new house.
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Keep an eye on your credit
Your credit score and report will have a large role in getting approved or denied for a mortgage. Make sure you pay all of your loans on time and work on paying down on any balances that you are carrying.
Your credit report shows how responsible you are with your debt. Prove to mortgage lenders that you would be a good risk for them to take.
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Adjust your expectations
Your first St. Louis house does not need to be your forever home. Look at what you can easily afford today instead of what you will need five years down the road. This will allow you to buy a house now and begin building equity in it.
Then, when you are ready to move from your “starter home,” you can either sell the St. Louis house or look at option to rent it out to others. This can be a great start to real estate investing.
Another way to change your expectations is to look just outside of the St. Louis neighborhood that you really want to be in. Look for neighborhoods that are transitioning on their way up so you can get in before the prices skyrocket. This is a good way to be close to the area you want, while keeping your budget in check.