Millennials are taking longer to save to buy a home thanks to a dip in affordability and a rise in student-loan debt.
But buying a home as a millennial is possible — we talked to five millennial homeowners to find out how they did it.
By adhering to a budget, using an assistance program, living rent-free with their parents, or opting for down payments below the standard 20%, they were able to save enough to buy their first home.
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Millennials are waiting longer to buy homes — but that’s because buying a home is harder than it was for their parents’ generation.
Millennials buying their first home today are likely to pay 39% more than baby boomers who bought their first home in the 1980s, according to Student Loan Hero. Housing is also less affordable for millennials compared to the overall population, whose incomes are likely higher because they have more work experience.
Millennials are also spending more on renting and are busy tackling a record level of student-loan debt, making it hard to take on a mortgage loan, Business Insider’s Akin Oyedele previously reported.
As a result, it’s taking millennials longer to save. But while it’s no easy feat, becoming a homeowner is possible. We talked to five millennial homeowners who managed to save enough to buy their first home.
They shared the savings strategies and tactics they used to become first-time homebuyers, from house hacking and assistance programs to budgeting and opting for lower down payments, as well as their advice on how to pave your own path toward homeownership.
SEE ALSO: Millennials are waiting longer than ever to buy homes — here’s how many years it takes to save for a down payment in 25 major US cities
DON’T MISS: The only right way to save money for a house
Remi Ishizuka, 30, bought an $875,000 home in Los Angeles by creating a separate savings account and visiting a financial coach.
Home location: Los Angeles, California
Home price: $875,000
Down payment amount: $262,500
Monthly mortgage: $3,800
The method she used: Old-fashioned saving with help from a financial coach.
Ishizuka saved diligently for five years before purchasing her $875,000 home in 2018.
“I cut back on expenses, and had a really strict monthly budget that I stuck to, and used a financial coach to help me stay accountable and within this budget each month,” Ishizuka, now a full-time blogger at Rrayyme, told Business Insider.
Her financial coach advised her to open a separate account for money allocated for a down payment.
“I would save in chunks whenever I got paid,” she said. She recommended that those who do the same keep their home savings account separate from their emergency savings account so they never have to touch it.
Ishizuka opted for a 30% down payment, meaning she paid $262,500 up front and has a 30-year …read more
Source:: Business Insider – Life