Part of buying a home is the down payment verification process. Here’s how you can prepare yourself!
Millennials: Entitled to your money?
When it comes to overall financial well-being, there’s no denying millennials have received the short end of the stick.
They’re graduating with more debt than any other generation in history. The eldest among them saw the entry to the workforce coincide with the Great Recession of 2008. Many boomers had to postpone their retirement plans after many lost their entire life’s savings.
It’s an inhospitable world for the millennial generation, whose careers are comprised of unsteady contract terms whilst navigating an ever-changing economic landscape. Sadly, they are unable to comfort themselves with the simple pleasure of avocado toast without being roasted by their elders as self-indulgent or blamed for the literal death of industries.
Considering homeownership, unlike their predecessors, most millennials simply aren’t able to save for the down payment. Which, in turn, millennials require to begin building equity by investing in real estate.
Currently, more than a third of Canadian millennials now own a home, with two-fifths requiring help from their parents to enter the housing market.
As housing markets continue to ride the crest with no break in sight. There’s no reason to believe the 82 per cent of non-home owning millennials who intend to purchase in the next five years won’t require similar assistance.
“64% of millennials who don’t own homes will need a higher salary in order to buy, but the two-pronged problem of sluggish wage growth and rising property values make it unlikely that all will be able to achieve their goal.”
Josh O’Kane, The Globe and Mail
As housing costs remain steady nation-wide. Millennials that would otherwise be priced out of the market are benefiting from parental generosity in the form of gifted down payments.
A gifted down payment is exactly what it sounds like; a gift of funds from a donor that the owner does not expect to repayment, like a loan would be.
While not every potential home owner is in a position to make a withdrawal from the bank of Mom or Dad. Speaking with an unbiased mortgage broker can help millennials with financial planning and ensure they meet future goals.
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