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Millennials, Student Loans and Homeownership

The term Millennial applies to young adults born between the years 1982 – 2004. Recent trends show that a majority of Millennials have not shown much interest in investing and buying a home of their own and would rather rent.

Annual homeownership rates across all generations declined after hitting their peak 10 years ago. One of the contributing factors to that was the housing market collapse, which lead to the recession. But a recent study of millennials found that they just don’t want to buy a house. The surveyed millennials were not asked for reasons why, but there are some good guesses. Young adults are getting a later start on marriage – per the census bureau. The median age of a first marriage for men is 29 and 27 for women.

Millennials still facing significant debt

Another reason why is the mounting student loan debt that millennials are still facing. Another survey was done with student loan borrowers and a majority said that student loan debt hindered them from buying a home. A high percentage of millennials in the same survey said that their student loan debt even prevented them from moving out of a family member’s house.

There are ways, however, for millennials that are interested in purchasing a home to do so. One main reason that prevented younger people from purchasing a home was the fact they could not afford a down payment. The answer to this would be to apply for an FHA loan, which requires for only 3% down of the purchase price. Paying 3% on a first home is not an insurmountable amount of money. For younger borrowers who have minimal credit history, banks are now considering someone’s mobile phone and cable payment history. Having a car loan and credit card can also help boost your credit score.

Millennials vs. Gen Xers

A 20 year history still shows that millennials are at or near the same rate of homeownership as the Gen Xers. The biggest thing for millennials is to not overextend themselves and live within their means. Looking at the numbers, it seems like they are.

As Schwartz Realty, we pride ourselves in helping first time homebuyers make smart decisions. Please call us at (702) 485-1400 for a free consultation with the top Las Vegas realtors and agents and discover what kind of home makes the most sense for you and your needs.

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Can the FHFA Mortgage Reduction Program Help You? – PART ONE

For homeowners who may be struggling to pay their mortgage, a rescue could be just around the corner. The Federal Housing Finance Agency (FHFA) decided to re-crunch the numbers and revisit reducing the principle of particular mortgages – specifically those backed by Fannie Mae and Freddie Mac. With this new program, the FHFA attempts to foster sustained income from distressed homeowners and forego foreclosure proceedings on the negative equity stricken mortgage(s). Put another way, FHFA is considering giving underwater borrowers a new deal on their loans, including reducing the amount of your mortgage.

Although not a real revolutionary idea, the FHFA’s willingness to challenge current policy maker’s views – that principle reductions do not follow best business practices and could lead to setting unwarranted precedents for future distressed real estate markets – could nevertheless deliver a win-win for lenders balance sheets and the negative equity concerns. In other words, the Federal Government finally believes reducing principal and getting underwater borrowers back on the path to paying for their homes is in everyone’s best interests.

With over 4 million homeowners still currently struggling with negative equity in the United States, homeowners who have loans backed by Fannie Mae and/or Freddie Mac might have the opportunity to reduce their mortgage loan balances and reduce their payments. With this new option, you could begin restructuring monthly expenses without filing for bankruptcy, while also avoiding further damage to your credit score.

Details for the program are still being released as it is not final, however, as the requirements and restrictions are released to markets and homeowners – loans that were excluded from the current administration’s Home Affordable Modification Program will now have the potential of (similar) principle reductions. What does mean for you? It’s time for you to take charge of your finances once again and begin exploring how this new program applies to you.

At Schwartz Realty, we can help you understand the best course of action and guide you through the process with ease. Let the some of the top realtors and agents in Las Vegas help you make the right decisions. For more information or to set up a consultation, give us a call today at (702) 485-1400.