Millennials: Here’s Why the Process is Well Worth It.

Millennials: Here’s Why the Process is Well Worth It.

Presented as a public service by Joe Peters of Coldwell Banker

Millennials have waited longer than any other generation to become homeowners, but the wait for this cohort is just about over.

According to National Mortgage News,

 “Millennials, those young adults now aged 23 to 38, are now entering their peak household formation and homebuying years.

If you’re a Millennial, you’re already well aware that you’re among a generation of those who favor fast-paced, real-time answers – and results. When you’re ready to make a decision, it’s go-time, and you probably want the latest technology at your fingertips to make it happen.

National Mortgage News agrees, stating,

“Millennials are different than previous generations—not only in their delayed homebuying but also in how they approach interactions with financial institutions, including mortgage lenders. Taking a picture of a check on their phone and depositing it without visiting a branch is not novel, it’s the way Millennials learned to do banking. They expect real-time access to account and transaction data and are frustrated when it’s not available.”

Here’s the catch – the overall speed of the homebuying process can take some time, and it might feel like it is slowing you down. When you’re ready to buy, you can make an offer and go under contract quickly, but the rest of the process might take a little longer. The same article explains why:

“When Millennials apply for a loan, the mortgage lender must qualify the borrower and determine who owns the property, how much the property is worth, and the property’s risk profile. Traditionally, this has been one of the most time-consuming and fragmented parts of the mortgage process…There are many moving pieces, each data point being sourced from a different provider, which can ultimately lead to a lengthy or delayed process.

 What has historically been accepted as the process norm does not align with the expectations of the most prominent generation in the home buying market today. Millennials have come to expect rapid, digital workflows in their daily purchase decisions, and in their mind, the home buying process shouldn’t be any different.”

So, where do you go from here?

 If you’re pre-approved for a mortgage, that will help speed things up. But the steps it takes and the time to finalize a loan with most traditional lenders may feel like an eternity to you and your generational peers. Don’t worry, though – it’s well worth the wait when you finally get the keys to your new castle!

The financial benefits of homeownership, like increasing your net worth by building equity, and the non-financial benefits, like being able to customize and improve your space, will ultimately set you on the course to happiness, success, overall satisfaction, and much, much more.

Bottom Line

If you’re feeling like it’s go-time, let’s get together and get the process moving to determine if homeownership is your next best step.


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5 Tips for Starting Your Home Search

5 Tips for Starting Your Home Search

Presented as a public service by Joe Peters of Coldwell Banker

In today’s market, low inventory dominates the conversation in many areas of the country. It can often be frustrating to be a first-time homebuyer if you aren’t prepared. Here are five tips from realtor.com’s article, “How to Find Your Dream Home—Without Losing Your Mind.”

1. Get Pre-Approved for a Mortgage Before You Start Your Search

One way to show you’re serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage. Even if you’re in a market that is not as competitive, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach. This will help you avoid the disappointment of falling in love with a home well outside your price range.

2. Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’

Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Before you start your search, list all the features of a home you would like. Qualify them as ‘must-haves’‘should-haves’, or ‘absolute-wish list’ items. This will help you stay focused on what’s most important.

3. Research and Choose a Neighborhood Where You Want to Live

Every neighborhood has unique charm. Before you commit to a home based solely on the house itself, take a test-drive of the area. Make sure it meets your needs for “amenities, commute, school district, etc. and then spend a weekend exploring before you commit.”

4. Pick a House Style You Love and Stick to It

Evaluate your family’s needs and settle on a style of home that will best serve those needs. Just because you’ve narrowed your search to a zip code doesn’t mean you need to tour every listing in that vicinity. An example from the article says, “if you have several younger kids and don’t want your bedroom on a different level, steer clear of Cape Cod–style homes, which typically feature two or more bedrooms on the upper level and the master on the main.”

5. Document Your Home Visits

Once you start touring homes, the features of each individual home will start to blur together. The article suggests keeping your camera handy and making notes on the listing sheet to document what you love and don’t love about each property you visit.

Bottom Line

In a high-paced, competitive environment, any advantage you can give yourself will help you on your path to buying your dream home.


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First Time Home Buyers: Your Six Month Plan

First Time Home Buyers: Your Six Month Plan

Presented as a public service by Joe Peters of Coldwell Banker

 

First time home buyers who dip their newbie toes in the mortgage waters might soon find out there’s a lot more to know than originally thought. It is a brand new world with lots of new terms, people and businesses and it can be a bit overwhelming at first. Heck, even seasoned buyers can find the mortgage process quite a bit to handle sometimes. But for first timers, knowing ahead of time what to expect and when to expect it will make the process a smooth one.

Here’s what to do financially when you’ve decided to stop renting and start owning.

Month 1:

You’re still sort of in the exploratory phase but you’re still committed on buying your first home. Yet buying a home isn’t something you should do on your own, especially as it relates to financing. Know this, though- most every traditional mortgage company offers the same suite of home loan options. Mortgage lenders spend a lot of time and effort on marketing and loan officers live and die from referrals but both will try and differentiate themselves from everyone else. Typically the primary differences are experience in the industry and stellar customer service.

Month 2:

Now it’s time to get some referrals for financing. You can get them from your selected real estate agent, friends and family or your financial planner or CPA if you have one. Once you make your choice about where you’re going to get your first mortgage, you’ll then speak with your loan officer over the phone or at the place of business. This is the prequalification stage. After a relatively brief conversation about your income, current debt and employment, the loan officer will research current mortgage rates and provide you with an amount you can comfortably qualify for as well as a list of loans that meet your needs.

Month 3:

It’s getting closer. But now it’s time to submit a loan application to your loan officer. Most often this is done online but your loan officer might offer to come to your home or place of business and take the loan application face to face. You’ll sign a list of documents, most importantly your loan application and authorization forms allowing the lender to inquire about your employment and credit history. Your loan officer will electronically submit your application to an automated underwriting system which will, within a matter of moments, provide a list of items needed to get your loan to the full approval state. You will then have a preapproval letter in hand. It’s time to submit copies of your pay check stubs, bank statements and tax returns if needed.

Month 4:

Your loan officer told you not to make any sudden changes about your work, employment or make any relatively large purchases. Don’t go buy a car while your loan is in process, for example. You have your preapproval letter in hand so it’s time to get serious about finding your first home. This, of course, is done with your real estate agent. And I can’t stress this enough- do NOT try and look for a home and negotiate with the sellers about the price. Professional real estate agents are pros at negotiations and you’re already out of your league. Let your agent do the heavy lifting by finding some housing options in the areas you’d like to live. And, surprise, a buyer’s agent doesn’t cost you a dime.

Month 5:

By now you’ve likely looked at your fair share of homes and you may very well be in a position to make an offer. You should always keep in close contact with your loan officer as well. Interest rates move over time and it’s possible that rates have gone up which effectively lowers the amount you can qualify for. Conversely, rates may have gone down and your buying power received a boost.

Month 6:

You’ve found a home. Wheels begin to spin rather quickly after the contract has been signed. Your lender will need an appraisal and many lenders ask for money to pay for an appraisal upfront. Your loan will be reviewed one more time and any expired documentation will need to be updated. Credit documents such as a credit report, pay stubs and bank statements need to be no more than 30 days old when it’s time to fund the mortgage. Once your loan has received full approval and you’ve met all your loan conditions, loan papers are orders. At your closing, you will sign a host of closing documents and have your down payment (if needed) and closing cost money wired to the settlement agent. After signing, the lender does one more review of your file, making sure all the documents have been properly signed. You’re now a first time home owner.


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Top 10 Features Millennials Want — and Don’t Want

Top 10 Features Millennials Want — and Don’t Want

Presented as a public service by Joe Peters of Coldwell Banker

Reposted from nahbnow.com

At least four out of five millennial buyers prefer laundry rooms, hardwood front exteriors, patios and garage storage. Conversely, they give a thumbs down to elevators, wine cellars and laminate countertops.

These were among the findings from a new study by the NAHB Economics team that focused on millennial home buying preferences.

The 2018 survey asked recent and prospective buyers to rate 175 different features on the following four-tier scale:

  • Essential: Unlikely to buy a home without feature
  • Desirable: Seriously influenced to buy home if included
  • Indifferent: Would not influence purchase decision
  • Do Not Want: Not likely to buy a home with feature

No. 1 is a laundry room, which 86% of millennials want. Other features on the top 10 list include a walk-in pantry, exterior lighting, a front porch and table space for eating.

Millennial preferences differed somewhat from baby boomers and seniors. Unlike millennials, boomers did not include a walk-in pantry, front porch, table space for eating and double sink in their list of top 10 amenities. Likewise, seniors omitted a hardwood front exterior, walk-in pantry, front porch and table space for eating from their 10 most wanted features.

Nearly half of millennials (47%) cited elevators as the feature that they are least likely to want, followed by cork flooring in the main living spaces (33%) and wine cellars (32%).

Millennials have also been shifting their preference of master and standard bedrooms over the years. In 2007, 80% preferred one full master bedroom suite plus three standard bedrooms and 20% desired two full master bedroom suites plus one standard bedroom.

By 2018, this 80-20 ratio dropped to 60% and 40%, respectively.

 

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Millennial Home Preferences vs. Other Generations

Millennial Home Preferences vs. Other Generations

Presented as a public service by Joe Peters of Coldwell Banker

 

Reposted from NAHBNOW.com

A recent study by NAHB reveals that millennials have a much stronger desire for certain bathroom features relative to older generations.

The report compiled survey data between 2007 and 2018 and found that the share of home buyers who want whirlpool tubs declines as the older generations age, but stays relatively constant for millennials. As of 2018, 70% of millennials expressed a strong preference for whirlpool tubs, compared to 62% for Generation X, 47% for baby boomers and 44% for seniors. See Figure 11.1 below.

Meanwhile, the share who want a dressing area increases for millennials while falling or staying constant for other generations (Figure 11.2).

Those who prefer his and her baths increases dramatically over the years for millennials and shows no real trend among the other generations (Figure 11.3).

Figures 12.1 through 12.4 below center on kitchen features. All four generations show an elevated preference for built-in kitchen seating. Of note is the increasing upward trend for millennials who desire trash compactors and built-in kitchen seating.

 

 

 

Finally, for the specialty rooms in Figures 13.1 through 13.3, millennials show a higher preference for exercise rooms, game rooms and media rooms than the other generations. Moreover, the gap between millennials and the older generations is quite substantial in 2018.

 

 

View the complete study.

 

 

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