A 2019 Zillow survey revealed that millennials comprised 39% of total buyers. A relatively far second placer was the baby boomer generation at 28%. The same Zillow survey also showed that 63% of first-time homebuyers are millennials.
From these market trends, it is clear that the young and upwardly mobile segment of the population sees homeownership as a goal worth investing in early on in life. If you are a millennial yourself with the same goals, here is what you need to know about buying your first home in Chicago.
It is never too early to save
A 10% or 20% down payment is a hefty amount for many millennial homebuyers. That is why saving up long before you even decide to buy a home is a smart move.
In the early stages of planning for that home purchase, you should have a clear idea of how much house you can afford to buy. That way, saving for a down payment becomes a much more manageable goal.
Settle most of your existing debt
By the time millennials decide to save up for a home, it is likely that they will have incurred non-mortgage debt. This may be in the form of student loans, medical bills, and credit card bills, among others.
It is important to settle most, if not all, of these debts before you commit to buy a home. Not only will this move increase your credit score which is a major factor in getting a mortgage application approved, but this will also help to make the down payment and monthly mortgage easier to manage.
Keep future maintenance costs in mind
In a city like Chicago, where temperatures can go as low as -23°F during the coldest months, chimneys, furnaces, boilers, and ducts need to be in good working condition. This is why Chicago homeowners allot a large portion of their budget toward maintenance and repairs of these heating fixtures.
Another area where homeowners in the Windy City put much of their finances is in ensuring that smoke alarm systems and carbon monoxide detectors are functioning properly.
Know what it takes to outshine other buyers in a competitive market
Millennials will be competing with other more experienced buyers from other generations. Here are some ways to improve your chances in a challenging housing market:
- Get yourself pre-approved. Mortgage pre-approval brings you a step closer to your goal. It is definitive proof of your financial capacity to purchase a house. Lenders will conduct a thorough examination of your credit history to determine the rates that are available for you.
- Maximize your strengths in digital technology. Today’s real estate market uses various digital platforms that can sometimes confuse or even deter older homebuyers – but not millennials. Putting that tech savvy to good use can help you move fast on a home listing and out-maneuver competitors.
- Craft a sincere and compelling narrative for the seller. Many home sellers appreciate it when buyers take the time to write a personal message that describes their interest in a particular home.
Also, make sure to seek expert advice on home buying in Chicago. For that, you can depend on the United Realty Group.
Published on October 19, 2021
