Have you been putting off the move from renter to homeowner because the whole process seemed so unaffordable? A recent report from the Federal Reserve found that 45% of renters have been delaying buying a home because they are unable to afford the down payment.
With the introduction of new products to encourage the move of renters to homeowners, mortgage providers are stepping up to the plate. Among the contenders, Fannie Mae and Freddie Mac have led the field with 3% down payment mortgage solutions for first-timers.
Then the traditional go-to mortgage solution for borrowers with limited down payments and credit, the FHA, also reduced its mortgage insurance premium. These moves were intended to give the U.S. real estate recovery a boost and encourage more first timers to enter the market.
Renter to homeowner but when?
As the cost of renting rises at a steady rate across the US, many renters are now considering the move to purchase their first home. With more options created by companies competing for business there’s never been a better time to make the switch from renter to homeowner.
Potential buyers of all ages have been impacted by the down payment/credit dilemma but it’s the Millennials who form the largest demographic contending with this question today. Let’s look at some of the factors that could indicate you’re ready to make the move
The lower interest rates on home loans are encouraging potential homeowners to make the move now before rates rise. Interest rates are expected to increase slowly back up to normal levels so locking in a lower interest rate now will make the big jump to homeowner less intimidating.
As unemployment rates improve, salaries will increase and this will increase the number of potential first time homebuyers. The desire to transition from renter to homeowner is fueled by a better income and is the main reason encouraging Millennials to take the plunge from renter to homeowner.
Along with this new found prosperity, more Millennials find themselves with growing households. Over 85 percent of generation “Y” contemplating the switch from renter to homeowner name marriage or expanding households as the reason for the move.
As the typical renter begins to make significant inroads on personal debt like student loans, car payments and credit card debt, home ownership begins to make more sense. Why pay someone else’s mortgage when you could be paying your own?
With low interest rates, and a rebounding economy, this could be the perfect time to make the changeover from renter to homeowner.
A knowledgeable agent in your community will be able to guide you along the path toward home ownership. If you are considering the transition from renter to homeowner, speak to experienced professionals who care. Why not give us a call today!