June of 2015 marked a huge change in the housing industry. In June millennials (born 1980-1995) became the age group most likely to buy homes in the US. There are a lot of factors driving millennials towards home buying– rising rent rates and an improved job market are making home buying a great option. In fact over a third of all jobs created in the past 12 months were filled by people in the millennial generation. Furthermore many millennials remember the great recession and have been saving accordingly (despite student loan payments). When you couple this with rising rent rates and consistently low interest rates over the last 5 years it should be no surprise that over 60% of millennials self admit to performing at least 1 internet search for real estate every month.
So what types of mortgages often make the most sense for millennials? Although every millennial has a different financial situation, this below list includes some of the most popular and accommodating options.
FHA Loans are popular among young professionals because they only require 3.5% down. Additionally FHA mortgages also have guidelines that are at times less stringent than conventional programs.
Added Bonus: FHA also offers a program called the FHA 203k Renovation Loan. This loan product still requires only 3.5% down but lets young professionals (and everyone else) find a home in need of repairs and then roll the cost of renovations and improvements into the loan itself so you still have one low monthly payment.
RD Zero Down Payment Loans
The title here may have given away the surprise but many young professionals who have stable jobs but little banked in savings love the USDA Rural Development Loan. The main feature of this loan is that it requires zero down payment, and has low monthly mortgage insurance. People often think that these loans can only be used on houses in the middle of no-where but that is not the case. Nearby cities like Rockford, Caledonia, Allendale & Zeeland all have areas that qualify.
Stop reading here if you or your spouse are not US veterans. But if you are… then this is a seriously cool program. The VA Veteran mortgage is a zero down payment, zero mortgage insurance, low closing costs— awesome home loan product.
If you are a first time home buyer in Grand Rapids or the surrounding area click here for some free first time buyer tips.
*Not all borrowers will qualify; contact us for more information on fees and terms
**These mortgages and all Treadstone offerings are available to all borrowers who qualify not just young professionals.
**Neighborhood Loans is an equal housing lender that does not discriminate on the basis of race, color, religion, national origin, sex, marital status, familial status, disability, source of income or age.