Thanks to the high cost of buying a home, more and more millennials are choosing to rent instead. No matter how hard mortgage lenders try to appeal to the millennial generation, it never seems to work.
Right now, many of the younger generations prefer to live the middle of a lively urban area where there is a happening night life and lots to see and do, even if that means paying rent that is much more expensive than buying a home would be.
So, the question remains, where do lenders fall short? Well, there are two reasons.
Well, one thing, it is unfair to lump all millennials together into one group. Secondly, there is usually miscommunication somewhere down the line between millennials and the older generations.
Need an example? Let’s say there is a lender who sends out a press release that illustrates the difference between millennials and mortgage lenders. In this press release, there are seven myths that “need” to be debunked. The problem is, the people who create that press release do not know millennials well enough to actually debunk any myths.
Here are a few examples:
Myth 1 – Millennials do not have the funds to purchase a home.
When an interest rate is low, even if only by a half of a percent, it can increase a person’s buying power, thus stretching your money. Essentially, you can buy a $315k home for about $300k. With that said, mortgage lenders don’t see millennials as a group whose business is worth working for.
Myth 2 – Preapproval from online applications saves time.
Contrary to the belief of many lenders, applying for mortgages and getting preapproved online is not solely for the lender’s and not the buyer. In fact, many millennial buyers feel quite comfortable dealing with their financial affairs online rather than sitting in a bank or an office. In all honesty, many millennials find it hard to believe when a company doesn’t have a way to access their services online. If more businesses were able to offer their services online, they would probably see a huge increase in millennial consumerism.
Myth 3 – It is cheaper to rent your home than it is to own it.
Although this remains true for the time being, if you were to buy a home, in five years you would still be spending less than if you were to rent for the same length of time.
Myth 4 – The requirements for receiving a mortgage are strict.
Lenders might lead you to believe that you have to jump through hoops in order to get a decent mortgage, but that isn’t always the case—especially if you are a first time homebuyer. You should always do your research before you start looking at homes. Sit down and talk to a lending professional to see what your options are when buying a home for the first time.