MReport October 2019

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TH E M R EP O RT | 53 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Knowledge Is King What must millennial homebuyers know before their big purchase? A re millennials falling behind on homeownership? According to a new report from LendEDU, mil- lennials that are not yet home- owners may lack some knowledge about key details of buying a home and obtaining a mortgage. According to LendEDU more than half the millennials—between the ages of 23 and 38 years—surveyed (58%), are homeowners, while 89% of the remaining respondents said they wish to become homeowners at some point in their life. Additionally, the majority of respondents (65%) think they can become homeowners within the next five years. The biggest obstacles for millennials who have not yet become homeowners are low incomes and a lack of savings. "Monthly mortgage payments can get quite steep and require a serious financial commitment that usually calls for having at least three months worth of payments stowed away in savings, so this result makes sense," LendEDU said. Other factors holding millennials back included "poor credit" (17%), "overwhelming student loan debt" (10%), "other debt" (6%), and "overwhelming credit card debt" (5%). LendEDU also examined how the 2008 fi- nancial crisis impacted the homebuying deci- sions of millennials. According to the survey, 13% of millennials cited the 2008-09 crisis for their lack of desire to own a home. LendEDU said that though this is not a large portion, it is large enough to take notice. Yet another factor holding back young potential homebuyers is the complicated mortgage buying process. The survey stated that 55% of millennial respondents said their lack of knowledge on homeownership and mortgages has prevented them from being a homeowner. Millennials lack information on the down payment amount, the survey revealed. On average, millennials are over- estimating the amount needed for a down payment, stating that 37% of the home's to- tal purchase price was necessary. In reality, though a 20% down payment is ideal and seen as the status quo mortgage down pay- ment percentage, a home-buyer can actually make a down payment as low as 3%. ™ | 972.458.8583 Coect Today! FICS ® , WWW.FICS.COM™, LOAN PRODUCER ® , COMMERCIAL SERVICER ® and MORTGAGE SERVICER ® names and logos are registered trademarks or trademarks of FINANCIAL INDUSTRY COMPUTER SYSTEMS, INC. Loan Origination Software Mortgage Servicing Software Commercial Servicing Software Your Mortgage Software Partner Since 1983 Save Time and Money! When you automate with FICS' loan origination and mortgage servicing software, you'll save money through a low initial investment, nominal monthly support and maintenance fee, paperless servicing or origination, real time processing, and enhanced productivity.

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