As Texas home lenders, we know it might be strange to think of our kids being old enough to buy a house—but as baby boomers grow older, their kids do too! Millennials are no longer the “youngsters” we used to think of as lazy or unmotivated. They’ve grown up into working adults—and now Generation Z is here, too.
- Generation Z’s young adults were born starting in 1997.
- Some of the “eldest” people who fall into the Gen Z group turned 22 years old this year.
- They’re leaving college and entering the workforce.
- Staring adulthood in the face, they’re beginning to think of their careers, family, and future.
Where we’ve seen millennials embrace change and follow wherever the wind takes them in the pursuit of their passions, Generation Z craves security and stability by contrast. As they look for housing beyond college life, Gen Z is beginning to talk with home lenders in Texas seriously about their opportunities in the real estate market to buy their first homes.
Are you part of home-loving Generation Z? The HomeSoon Lending Team is here to help you through the process of buying your first home! Start with our tips to save up for the down payment for your first home.
Save, Save, Save
Buying a house isn’t something to do on a whim—but you already know that. You might be ready to get out of a dorm or apartment life, but buying your first home requires planning—and that planning starts with your down payment. With low interest rates due to COVID-19, your down payment has become more crucial than ever!
How much money can you put down toward a home? For Gen Z, a house is likely the largest purchase you’ve made so far—aside from college loans. Your down payment has to be a priority when considering your home purchase.
As Texas home lenders, we urge you to keep these principles in mind:
- The more money you put down, the less money you need to borrow to finance the purchase price of the house.
- Your down payment can help reduce your monthly mortgage payments considerably over the life of your loan.
- A larger down payment puts you in a more desirable position with your lender to qualify for better home loan options.
- For many lenders, a larger down payment is now expected due to the impact of COVID-19 on the housing market.
Saving toward a down payment every month can quickly add up! Decide on how much you want to save for a down payment before you start the loan pre-qualification process.
If you aren’t sure where to start, in 2019, the average down payment for first time home buyers was about 6% of the purchase price of a home. However, you’ve probably heard how important it is to put down 20% on the house. Is that still true?
20% Down Is Still the Standard
For generations before you, saving up to put 20% down on your house was the norm. Texas home lenders typically offer better interest rates and payment options if you have the ability to cut a check for 20% of the purchase price of your new home.
In the wake of COVID-19, this still holds true: before the global pandemic Gen Z (and many others) found it financially feasible to purchase a home and manage monthly mortgage payments with a down payment lower than 20%—even when their credit was below 700. Where once it was possible to qualify for many types of loans at competitive interest rates if you had less to put down on your new home, many lenders nationwide are tightening up their restrictions as a wave of job losses created concern that there would be another housing crisis.
With that in mind, saving as much as you can for your down payment is still critical. However, when you work with the right mortgage lender, they can help you find a balance between your down payment amount and a home loan that doesn’t overwhelm your monthly finances.
Buying a Home Is Still Within Reach!
Gen Z has an ambitious outlook on life with a deep desire for a place to put down roots. However, finding a place to call home still requires that you work with the right Texas home lenders to make your dreams a reality!
Unless you pay cash-in-full for a property, buying the right house under the best circumstances requires surrounding yourself with a local team of mortgage experts. Realizing your dream of owning a home (whether it’s your dream home or just your first step into owning property) is easier to achieve with help to support your plan.
From partnering with a Realtor to choosing the right home mortgage companies, you’ll deal with plenty of people before you find, finance, and close on your new home. The right mortgage broker helps you through the application process, makes sure you understand how much house you can afford, and shows up on the closing day to finalize your financing.
Choose your team wisely! Your first home is waiting.
Avoid Delays With the Right Lending Team
When you find your first home, you’ll be anxious to finalize the sale and move in! However, the wrong home mortgage companies and funding can cause a delay in closing.
We hate seeing that happen! That’s why the HomeSoon Lending Team approaches the mortgage process in a way that gets you into your new home faster. Learn more about mortgages and the mortgage process with your free copy of the HomeSoon Lending Team’s Road Map to Mortgages!