There are four major fears keeping Millennials from buying a home, according to a recent survey from NerdWallet: the fear of committing to a partner; the fear of inevitable home repairs; the fear of not having money for other expenses; and the fear of the financial commitment to a home.
The fear of committing to a partner
The NerdWallet survey found that 20 percent of Millennials ages 18 through 34 were afraid of the long-term commitment buying a house with a partner represents. However, only 4 percent of the 2,000 respondents ages 35 and older shared the same fear.
Chris Ling, NerdWallet’s head of home buying and mortgages, understands where the fear is coming from. He explains, “It’s not as simple as if you split up, one person can stop paying”.
To help eliminate the fear, agents can frame the property as an investment they can rent out if the partnership doesn’t work. According to bankrate.com, Millennials should consider the option of reselling the house to move past the joint debt or refinancing the loan under the name of one person in the house as an easy fix.
Struggling with home repairs
Fixing any home repairs due to weather, accidents, or updates are all things that can happen, which causes doubt in Millennial’s decision to purchase a home. Home repairs are not something that should hold a homebuyer back.
Websites like Angie’s List, Houzz, and HomeAdvisor specialize in helping homeowners find professionals to tackle renovations, complete with prices and reviews. Another easy fix would be to find financial assistance such as an interest free loan to take the pressure off affording the repairs.
Limited freedom with other expenses
When it comes to the freedom of purchasing other expenses, Millennials expressed their concerns. Bank of America offers tips on how to manage money to leave room for other expenses.
First, Bank of America suggests Millennials set goals they wish to accomplish. Next, the bank suggests they know their net income to better understand how much money they have to work with. And lastly, Millennials need to track their spending.
Still, despite the prevalent fear of limiting their financial freedom, results showed that 42 percent of Millennials are smart savers compared to only 29 percent of those aged 34 to 54.
Financial commitment to a home
Buying a home is one of the biggest purchases a person is ever going to make, and it scares Millennials. Bankrate.com offers tips on how to purchase a home the smart way.
Potential homeowners should first build strong credit to help with securing a loan. By demonstrating the ability to save and budget, Millennials can prep themselves for the mortgage paying process. Also, reducing debt as soon as possible, whether student debt or something else, is always recommended when going into an important purchase. Ultimately, your buyer should be informed. The dangers of entering the market without proper information could cause the homeowner to back out prematurely.