Life hasn’t been easy for Millennials, the term for people born from 1980 to 2000. Studies show that 90 percent moved out of their parents’ household by age 27, but of those moving out, more than 50 percent returned. In fact, this phenomenon is so common that there’s a term for it: Boomeranging.
So, how is a young working person going to move out and make a new life with a place of his or her own? Interest rates are as low as they’ve been in decades. And it’s a little tough to expect sympathy from Mom and Dad, considering many of them paid upwards of 18 percent interest in the late 70s!
Compared to older generations of homebuyers, Millennials are more likely to finance home purchases out of current income rather than savings, and when taking out mortgages, they are more likely to use unconventional zero-down mortgages.
Now there is even more incentive for Arizona Millennials to buy, not rent, with a new mortgage program by the Arizona Housing Finance Authority for first-time buyers. The AzHFA “HOME Plus” Mortgage Loan Origination Program provides a competitive 30-year fixed-rate mortgage with a down payment assistance (DPA) grant equal to four percent of the mortgage amount. So you’ll pay a little more with each payment, but no longer struggle to come up with a large down payment of $10,000 or more to qualify.
These mortgages are available for the purchase of an owner-occupied, primary residence only. Your household income can’t exceed $88,340 and the purchase price is limited to $353,360 or less.
However, even without the use of programs like AzHFA “HOME Plus,” buying a home today is a great way to build equity net worth. The Home Affordability Index is still at a high level and the speculation is that interest rates will start rising in 2015 driving the index down and making it difficult for some first-time homebuyers to afford a home. Ask your Realty Executive professional for more information about this and other programs. QCBN
By Don Bonnell
Realty Executives Northern Arizona has nine separate offices represented by 125 real estate professionals. Trust them to help you make the right first steps on the road to home ownership. Check the current listings at www.realtyexecutivesaz.com.
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