Millennials are buying homes near the beach: Buy yours now

You thought that only Boomers can afford to buy a home. Did you ever think you could ever afford to buy a house near the beach? Read further, I will tell you how one Millennial couple did just that. The fact is that Millennials are buying homes near the beach: Buy yours now! Don’t let anyone tell you it’s impossible to have your dream home within walking or a short drive to the beach.

It occurred to me that there is so much bad information circulating about how “Millennials don’t want to buy houses” and “Millennials can’t afford to buy homes near the beach”. None of this is true. This article will serve as a foundation for a series of focused articles I will be adding to my Millennial Financial Resources Series about Millennials being the greatest holders of real estate in history.

Yes, you and your generation will eventually own more real estate than any previous generation. It’s not going to happen unless you get great, factual information soon. My future articles and short course will help you over the hurdles and get you going. The articles and course will show you exactly how to buy a house and later buy a residential rental property.

A selection of articles in our “Millennial Financial Resources Series appears below. Click and continue reading. Sign up below to receive notices of new articles.

Interest rates are higher than they have been but there are programs to help

Yes, mortgage interest rates are higher than they have been recently but they are lower than they have been historically. There are programs to help buy your first home. Many millennial buyers are frozen out in the markets where they live. Fortunately, with the advent of remote working, some young adults can relocate to areas where they can afford to buy a house.

It’s time to leave the metro areas and live near the beach. You can afford to buy a single-family home on the Mississippi Gulf Coast. This is not San Francisco, prices on the Mississippi Gulf Coast permit young people to make a small down payment and get into their first house on the types of incomes young people earn when just starting their working life.

Millennials on the Gulf Coast don’t understand all of the fuss

A lot of Millennials own or are buying homes on or near the beach on the Mississippi Gulf Coast. Our area is one of the most affordable markets in the country. If you are tired of that small Manhattan apartment or being just another one of those Millennial renters, make the move to own your first home now. I meet millennial homeowners daily. They do not know what all the fuss is with articles stating that millennial homebuyers can not afford to buy a home. Remember Millennials ARE buying homes near the beach: Buy yours now.

Time for a practice run, use our calculators below

Do a practice run to see if you can buy that house listed below for under $200,000. Use the form provided below this paragraph to enter information about the house you intend to buy. Why not enter $175,000 for the house listed below. I will even give you some other numbers to add such as:

1. Payments 360 for 30 years
2. Enter 6% for the interest rate unless you have seen a different rate that may apply to you
3. Annual homeowners insurance premium – Use $1,800 (could be more or less)
4. Annual flood insurance – For this house enter zero
5. Homeowners association fees – enter zero
6. Annual county property taxes – Use $1,900 (there are programs to help reduce this)

Take the “Total Monthly Payment” number and enter it further below in the first field of the Millennial Debt-to-Income calculator. Watch the video below before going through the last form.

You must have a steady income and a good credit score

There are two basic requirements for buying your first home. Your household income must be sufficient to cover the mortgage, insurance, and taxes. Plus, any debt you currently have. This is called a debt-to-income ratio. Use the calculator below to see how much house you can buy. Watch the short video on how to use the calculator first:

Millennial Debt-to-Income Calculator

Credit scores can be confusing

Now that you have looked at your debt-to-income ratio, the next step is to look at your credit score. You can obtain your scores at FICO. There is a charge for this service. Don’t be confused by all of the scores they show you. The lender will run a report and tell you if you qualify based on the type of program you want to use. FYI, if the average of all three credit bureau scores is above 620, you may qualify for a loan.

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Credit Karma, really

If you are like many of us, looking at Credit Karma can give you a false sense of how great your credit score is. Don’t believe that score. They try hard to give you something you can work with but that score is not going to mirror the three agency scores that are used for mortgage loans.

You can, however, use Credit Karma to look at your credit report and to see the variation in scores from month to month. The variation is useful to inform you of changes that may be important to look into. You need to get the FICO scores from a loan broker or buy them directly.

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At this point, with your ratio in line and your credit score in good shape, the last item is your income. You entered the income data into the credit ratio calculator. You must prove that income and it’s best if you have had a steady source of income over the last two years.

What if there are two of us buying?

If you are married or have a partner, you can combine both incomes to qualify assuming both of you will be on loan. If there are two individuals, all six scores will be averaged and the lower of the scores will be used to determine your credit score and interest rate. That’s the magic, two millennials buying homes near the beach is a winner.

Back to that house. One of the best places even on the Mississippi Gulf Coast to buy a home in Gulfport. The price range for homes there is from under $100,000 to just over $200,000 for homes that most Millennials can afford just starting. The real estate market on the Gulf Coast has been active with buyers in charge. Things are changing and we may see a balanced market shortly. Affordable housing is still available.

It’s a good idea if you think after reading this article you can qualify to buy a house to get pre-qualified. Contact a mortgage broker and apply for a loan. Of course, you need to have enough money for the down payment and closing costs. The good thing is there are low-entry programs available e.g. FHA 3.5% down payment loans.

Home sales to people applying for FHA loans are high on the Mississippi Gulf Coast. This tells you that others in your generation were able to obtain a home loan. A reminder Millennials are buying homes near the beach: buy yours now.

A minimum wage couple can buy a house near the beach?

Mortgage lenders work with first-time buyers regularly on the Mississippi Gulf Coast because our market is so affordable. Housing prices in this area make it possible for a couple with near-minimum-wage jobs to buy their first home.

Did I mention leaving near the beach? It’s time for a story. I just represented a Millennial couple who purchased a house within walking distance of the beach. They paid just under $200,000 for their home. This was a three-bedroom ranch with two bathrooms. Proof that Millennials are buying homes near the beach

The house was completely remodeled with the latest in everything. From plank flooring to the farmer’s sinks in the kitchen, top to bottom. It was 100% move-in ready. The house is located in one of our many affordable neighborhoods. Being so close to the beach was a bonus.

This couple was able to buy the home with only 3.5% down on that FHA loan program mentioned above. During the search for their home, I found several other options that would have fit their budget. One was located even closer to the beach in another one of our best cities. The asking price was $175,000 and it needed work. The final cost would have been about $200,000 and the house would have been like new.

There are homes available at your price point

There were many more examples and some homes at even lower prices were located further from the beach. The point here is that there is sufficient inventory that you have choices. This past year fewer homes have come to the market but that is changing.

The American Dream is alive and well on the Mississippi Gulf Coast. First-time buyers look at homes from a cost perspective and the schools around the homes. Often first-time buyers have children or will have children so schools are important. The schools on the Mississippi Gulf Coast are highly rated.

Before I go further, it’s time to look at some calculations to show you how much income you would need to buy a real house. The photo of the house below is as of this writing being offered for sale at $175,000 After the house, you will see the calculations and the income and cash required to buy this house. If you want to see the actual listing on Logan-AndersonLLc.com, click here. If it’s sold, look for a similar one at that site.

FYI, the FHA permits a gift of cash from a family member that may cover the closing costs. It can not be a loan, a gift is not “required” to be paid back.

Try to find this house at this price in Los Angeles or San Diego or Silicon Valley. You won’t. Sorry for this dig, if you live in one of these areas you understand exactly what I am talking about. The net worth required to buy a home in one of those cities is out of range for people just starting. Even many older Millennials would struggle in those areas. Please understand that for you to afford the mortgage payments on a new home, you may have to move.

The house below is affordable and new

The house above is new. It’s listed on the Logan-Anderson Gulf Coastal Realtors site. Click on the photo to take you to the listing. This is one of many in the area for sale which may have been sold by the time you click. This was posted in June 2022. Another example of a house that is affordable by a Millennial couple looking for a first home. Use the calculators above to determine if you can afford them.

I would have to move and leave my friends and family

About moving. Of course, you need employment to qualify for a house regardless of your generation, etc. When you move, you leave your friends and family behind. That’s difficult however, they will not be paying your mortgage. When my wife and I relocated from Southern California to the Mississippi Gulf Coast, we were accosted by our friends and family.

Why are you leaving? We had discussed this well before the move and told everyone that if they agreed to support us in retirement by making our mortgage payments and supplementing our bills we would stay. 

Our friends and family in California are still our friends and family. We talk to them and Facetime. Texting and emails help. One family member moved to our location as did some friends. We visit with family as they come to see us. We will travel back to California from time to time. You can meet new friends in your new location. We have met so many new friends in our new home on the Mississippi Gulf Coast. Don’t be afraid to make the geographical move if you can improve your lifestyle.

You are not looking at retirement now but!

Millennials and Gen Z people are not looking at retirement this early in their new careers. I mention this because someday you will be thinking of retiring. If you can’t afford to buy where you are now, how can you afford to live there in the future even as a renter?

If you do what many young people do, live in the big city, where everything is expensive, you are mortgaging your future. Can’t you find a better use for the excess cash you may be wasting overpaying for everything?

Mortgage rates are likely to increase a bit for the next year or two. They may come back down in the future but regardless you need a place to live and in some areas, you can buy a house for less than you can pay for rent. The Mississippi Gulf Coast is one of those places. Rents are low here compared to the high-cost states but in some cases, you can buy for less than you pay in rent.

Is it time to make a bold decision?

This could be the right time to consider making some bold decisions. In the long run, if you move now and buy something you can afford, your children will grow up in a place where they can stay through the school years. You may decide to buy that affordable house the same way previous generations did by hard work and taking risks.

Take a look a the housing market where you live now. Can you afford to buy it? Even if you can afford to buy, should you overpay? What could you do with all the extra money you are paying for a home in an expensive area? How about saving for the future with the difference?

I have given you two important tools above to determine if you may qualify for a mortgage loan. Please use them to create financial independence for you and your family.

I hope that this article is helpful to you. This is one of a series of articles written specifically to assist Millennials to succeed in life. Many parents of Millennials did not have the skills to teach their children some of these life skills. Hopefully, this series of articles will help you. To get the most of them, please click on the other articles in the series that you have not yet read (some will be posted soon if you click and are returned here, come back soon when the article will be posted):

The foundation article is: Millennials Are Buying Homes Near The Beach: Buy Yours Now

Budget Calculator and planner: Millennials Need This Now – You need to know what these required programs mean for those putting less than 20% down. This article explains your choices and what each means to the cost of your new home.

23 easy ways Millennials can improve their credit scores: 2022 it’s time to get that credit score higher. This article goes into all things credit reports and credit scores to help you pay the lowest interest rate possible. Use our tools and learn how you can keep your score high and improve it if it’s low.

The Homeowner’s Insurance Puzzle Made Simple for Millennials 2022 You need this information to make informed decisions about your homeowner’s insurance policy. Without a policy, there is no mortgage. You can overpay for coverage that others will offer for a lower price. When should you claim for damage, theft, etc.?

Credit Cards – How to get the most out of credit cards and manage them to your benefit.

Mortgage Insurance – You need to know what these required programs mean for those putting less than 20% down. This article explains your choices and what each means to the cost of your new home.

The best mortgage loan guide for Millennials: Start now 2022– This article goes through an actual loan application so you can learn the process and how best to complete the form.

Millennials: How to find your first house in 2022 One of our longer articles goes through the entire process from locating a real estate agent to making the offer and the many steps that happen after the offer is accepted. Read this article after you have read all of the above articles because now you will be ready for the process.

This process takes from sixty to ninety days from the time you are ready to buy until you have the key. It’s an intense period that requires your complete attention and focuses on details. It’s also the most exciting part of the process. Finding that dream home may be a fast or slow process depending on a wide variety of factors discussed in this article.

We take you through each detail and show you most of the forms you will be required to sign during the process. Start working on those hand exercises, your signing hand is about to get busy.

Logan-Anderson Gulf Coastal Realtors is here to help you. If you are eventually looking for an affordable house in an affordable market, please go to our leading site LoganAndersonLLC.com where you can look at homes for sale. The Mississippi Gulf Coast is one of the most affordable home markets in the country. Read more about the area at RetireCoast.com

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