(NAPSI)—The American Dream may have looked like more of a nightmare to the millions of millennials who entered the workforce in recent years—but there could be good news.
This generation, born between 1981 and the early 2000s, has a desire to pursue passion over traditional expectations. Dreams of white picket fences have been replaced by a strong desire to invest in the future. This shift, however, means many millennials pay rent instead of a mortgage.
“Millennials have been swayed to believe that homeownership means a financial burden and stress,” said mortgage lender Joel Gurman. “The reality is our current housing market, paired with the financial opportunities made possible by generationally low interest rates, have opened up homeownership to many people and have actually proven renting to be an expensive and unnecessary burden.”
Here are five mortgage myths and actualities for millennials:
1. Buying a home is more expensive than renting:Unlike rent money, a mortgage payment goes toward ownership. Home prices have stabilized recently and rates remain near record lows, making payments quite affordable while gaining valuable equity.
2. I need a larger payment: Millennials often assume their limited years’ worth of savings won’t equal a large enough down payment on a home. The reality is, with standard Fannie Mae- and Freddie Mac-insured loans, a down payment as low as 5 percent is enough, while FHA-insured loans only require 3.5 percent.
3. My credit score is too low: With the stresses of credit card debt and student loans, millennials often struggle to maintain a desirable credit score. Fortunately, several programs, including the FHA mortgage, offer favorable credit score minimums.
4. The process is complicated and confusing: With their busy lives, millennials often assume the process of buying a home is too burdensome. Mortgage lenders today are making it as seamless as possible through technology, accessibility and mobile apps such as MyQL by Quicken Loans, the nation’s second largest retail mortgage lender, which allows clients to upload supporting documents and check the status of their loan online, anytime.
5. Homeowners must take on a 30-year payment: Thirty years can seem overwhelming for the millennial with a lifestyle fueled by the ability to be free. In reality, many lenders offer terms ranging from eight to 30 years, for as much flexibility as desired.
Of the positive outlook for millennials, Gurman adds, “The future of our housing economy looks bright for millennials looking to re-evaluate their current financial hopes and dreams.”