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Mystery Solved: How Millennials Afford Their First Home

All over the world, first-time homeowners are reported to be a lot older now than they used to be. The truth is that the age at which you buy your first home has risen by about 7 years since the 1960s. However, first-time home buyers in the US are around 33, which remains a relatively young age for such a significant life choice.

With college studies lasting until age 22 (for a Bachelor’s Degree) or age 24 (for a Master’s Degree), you only have about 10 years to pay down student loans and save enough for a down payment if you want to buy by 33.

In other words, Millennials are very early in their professional and financial life when they own their first home. With everything getting more expensive, the big question is: How do they afford it?

They don’t go to their bank

The best strategy to get the best mortgage solution for your situation is to stay away from your banker. Why? Because, as a general rule of the thumb, banking institutions have a highly limited range of mortgage options.

In a world where everyone is different and has various needs and requirements, Millennials prefer to engage directly with professional mortgage brokers such as https://altrua.ca to explore a variety of tailored options.

Building perfect credit can be difficult if you’re weighed down with student loans. But brokers can provide more favorable solutions for low and mid-range credit scores than standard banks can offer.

They develop cost-saving habits early

Let’s tackle the elephant in the room. Homeownership comes at a cost. Millennials who succeed in buying their first home without increasing or creating debts are people who understand how to manage their expenses.

Every dollar saved, small and irrelevant though it might seem, goes towards a common financial objective at the end of the month. From cutting down energy costs to saving on the daily commute, Millennials give themselves some financial breathing room ahead of a mortgage application.

They embrace the property ladder principles

When you buy your first home at around 33, you also need to be aware of the property ladder phenomenon.

Your first home is likely to be small, as it’s going to be not only more affordable as a while but also more manageable in the long term. It doesn’t mean you will never own the 8-bedroom mansion of your dreams. But as all ladders go, it’s a matter of upscaling strategically. When you sell your started home, you’ll be able to use the proceeds as a down payment on a larger home. And repeat the process every 5-10 years until you’re in your dream home!

The secret is never to buy more than what you can afford. On the contrary, you should aim to stay well under your affordability threshold.

They look for alternative income

Last, but not least, Millennials are money-smart. They understand that everything has a price, and turns it to their advantage by selling their services as a side hustle – get some ideas on how real Millennials are making it work on https://www.dividenddiplomats.com. From sharing your ride on Uber to getting paid for online surveys, there’s a lot you can do to build up the necessary side income.

While most Millennials wait a little longer to buy their first property, they are no less financially savvy than the previous generations. In fact, if anything, successful young homeowners have a better grasp of money and value than their parents and grandparents at the same age.

And now that you know how Millennials are able to afford their first home, you can join them in buying your first home!