Last year, Apartment List surveyed 24,000 millennial renters and asked if they wanted to buy a house. An overwhelming 80% said they did, but the cost of homeownership often stands in the way of their home buying ambitions. When asked to specify which obstacles they face, respondents cited the down payment as the top issue.
We've documented the struggles millennials face when it comes to saving for a home in prior blog posts, particularly the problem of student loan debt. A recent survey by the National Association of REALTORS® confirmed these struggles, finding that 83% of non-homeowner millennials said student loans were the reason they couldnn't save for a down payment.
Not only can student loan payments hamper the ability to save, they can also prevent millennials from qualifying for a mortgage. This is because banks consider a borrower's debt-to-income (DTI) ratio when making mortgage loan decisions. If an applicant's DTI is too high —meaning they have too much debt compared to their income — they won't qualify.
And if a borrower misses a student loan payment or even worse defaults, their credit profile takes another hit. That damage can take months or even years to repair.
The good news is that we can help millennials overcome these hurdles and realize their dream of owning a home.
First and foremost, we provide down payment assistance grants of up to 5% to eligible low and moderate-income buyers through our Home Sweet Texas program. Click here for more information about the program's basic requirements and how to apply.
We also provide Mortgage Credit Certificates (MCC) to first-time home buyers. An MCC is a special mortgage interest tax credit that can save you up to $2,000 every year on your income taxes. Borrowers can include that extra income when applying for a mortgage loan.
And for millennials trying to improve their financial and credit health, we created the Texas Financial Toolbox. This website will connect you with an organization that will help you manage your finances, save for a down payment, improve your credit profile and achieve any other financial or homeownership goals.
On the House blog posts are meant to provide general information on various housing-related issues, research and programs. We are not liable for any errors or inaccuracies in the information provided by blog sources. Furthermore, this blog is not legal advice and should not be used as a substitute for legal advice from a licensed professional attorney.