Here’s How To Get a Home as a Middle-Aged Millennial With Debt

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Not so long ago, millennials were the cool new kids in town. Marketers were drumming up ways to reach this increasingly mobile and eco-conscious cohort who hopped from job to job and seemed to value the occasion of brunch like no previous generation.

Millennials may still hold the same values they did when they were bright-eyed things during the tumult of the Great Recession (our love of doing everything online, especially shopping, for instance, has continued to thrive), but we’re not exactly spring chickens. Some of us are rounding the corner to 40 in not too many years — and the oldest of our generation are already there.

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Just like that, millennials have become middle-aged. The aging process is natural, but what’s not so natural is being buried in student loan debt when you’re already knee-deep into your career. Because of overwhelming debt, the average millennial totes a net worth of just $8,000 and still turns to their parents for money. With stats like this, how can the typical middle-aged millennial even begin to think about buying a home, were that her goal?

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Well, she can begin by recognizing that actually, millennials can, should and do buy homes all the time. A new report from the National Association of Realtors found than in 2020, millennials made up the biggest share of homebuyers at 37%.

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So, if you’re a middle-aged millennial who is still fighting down student debt and wondering how you’ll ever be able to afford a home, bear in mind that plenty of millennials in similar boats have positioned themselves to be able to purchase homes. You can, too. Here’s a look at how. 

Stop Being Inhibited by Your Student Loan Debt

“One of the biggest misconceptions I come across working with younger clients is that they need to have their student loans paid off before getting married, having children or buying a house,” said Brian Walsh, senior manager and CFP at SoFi. “I am a CFP and have done all three of those things and still have student loans. The fact is, student loan debt typically charges low interest rates that might not be advantageous to aggressively pay down ahead of schedule. Large amounts of student loan debt might make your budget tighter but you should not think that all of your loans need to be paid off before accomplishing other major milestones.”

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Related: Two-Thirds of Older Millennials Are Still Paying Off Student Debt After 10 Years

You Can Put Down Less Than 20%

For decades it was the rule of thumb that homebuyers plop down 20% of the home’s price as a down payment, but that’s no longer a deal breaker. Most people are putting down less than that, with a December 2020 survey from the National Association of Realtors showing that 73% of Americans who purchased a home in November of 2020 put down less than 20%.

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“Millennials purchasing homes right now are more often than not putting down less than 20%. With interest rates being so low and first-time homebuyer programs, such as FHA loans, buying a home with less than 20% isn’t as expensive as it once was,” said R.J. Weiss, CFP and founder of the personal finance site The Ways to Wealth. “That said, millennials considering this route are best to have a plan to secure a traditional mortgage, by gaining enough equity as fast as possible.”

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Review Your Amortization Schedule

To start dealing with your student loan debt so that you can get on the right track for home buying, you might want to review your amortization schedule for your student loans. 

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“Usually I recommend people pay off their student loans in 10 to 20 years as long as their interest rates are at 5% or below so your money can work for you in other ways,” said Michael Shea, a CFP in Nashville, Tennessee. “This way you know when the payoff date will be and you can back into a budget friendly payment schedule. This may help free up some money to save for other financial goals such as a house down payment if you’ve been very aggressive on paying down student loans.”

Take These 3 Debt-Eliminating Steps

Here’s a quick three-step explainer on how to shave down your student loan (or any) debt quickly, courtesy of Mason Miranda, credit industry specialist at Credit Card Insider

  1. Start eliminating debt with the highest interest rate. This is called the “Avalanche Method” of debt repayment. This can decrease your monthly expenses dramatically and help free up that money to go toward a house.
  2. Getting rid of some debt lowers your debt-to-income ratio (DTI), which looks better to lenders. The less you fork out to other debts, the more you can put toward a mortgage.
  3. Don’t get rid of all your debt. Many lenders like to see that you are currently paying off some debt, and having no debt when you apply for a mortgage can make you look bad.

Discover: Millennials Are Taking Risks When It Comes to Homebuying — But Are They Worth It? 

Look Into FHA Loan Programs and Other Arrangements

“Another option is to look into different mortgage products offered by lenders,” continued Shea. “A VA loan or FHA loan requires zero to 3.5% for down payment. This can make it much easier to get into a house, assuming you can afford the monthly payments.” 

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We internet savvy millennials should also be on the Google search for first time home buyer benefits and programs. There are plenty of home buying grants out there. You can get a good glimpse of what’s out there, here

Consider Buying a Home That Isn’t ‘Perfect’

Middle-aged millennials looking to purchase a home when money is tight should consider augmenting the boundaries of their search. 

Boomers vs. Millennials: A Look at the Financial Gap Between Generations

Although it’s appealing to buy a house that meets all of a buyer’s criteria in its current state, those are the houses that are flying off the market,” said Libby Weissman, VP of marketing for Realm, a centralized data hub for homeowners. “We’re seeing buyers have more success looking into properties that have potential, specifically homes that might not be big enough in their current state, but are zoned for additional square feet. Using this approach, buyers can bid on less competitive properties, pay less and invest in updating the property over time.”

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Last updated: May 19, 2021

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About the Author

Nicole Spector is a writer, editor, and author based in Los Angeles by way of Brooklyn. Her work has appeared in Vogue, the Atlantic, Vice, and The New Yorker. She's a frequent contributor to NBC News and Publishers Weekly. Her 2013 debut novel, "Fifty Shades of Dorian Gray" received laudatory blurbs from the likes of Fred Armisen and Ken Kalfus, and was published in the US, UK, France, and Russia — though nobody knows whatever happened with the Russian edition! She has an affinity for Twitter.

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