Said no child ever, but as we millennials approach the twilight zone, reality is quickly setting in. Whether we like it or not, an upgrade to Adulting 2.0 is inevitable. For some it's marriage, for others its finally choosing the right pet, but for most it means the pursuit of homeownership.
It's a journey often described as complex, so we sought the help of Financial Blogger Gillian Jackson, to lay this crooked path to your own set of keys straight. A Senior Business Advisor with the Jamaica National Group, @MsGillyJ as you perhaps may know her by her Twitter handle, has been serving course after course of financial and wealth management nuggets to young people on the timeline. She does not consider herself a financial advisor (she is not licensed as such), however her research on different financial products and services has saved many; literally and figuratively.
'I started in August 2019 but it's something that I have been thinking about for years. I wanted to start a blog to assist persons to understand some of the processes and products related to banking and to other financial institutions and I started with mortgages because that's the most complex loan that an individual can apply for' she says.
And we are happy she did. Her blog, financialcentsibility.com (cute name right?) is that one stop shop for many young professionals trying to manage their personal finance. The testimonials speak for themselves. 'People have let me know that because of a post that they saw they took steps to purchase a home. I am grateful when even one person improves their knowledge because I do recognize that there is no class that teaches the important aspects of homeownership' she tells us.
On that note, we asked whether she was seeing more young persons becoming homeowners. Like a true data scientist, she explains that her data set at the moment only includes personal testimonials but notes that the interest by young persons is overwhelming.
But why should young people consider homeownership?
According to @MsGillyJ 'it should definitely be considered, especially for an individual/family paying a significant portion of their income in rent. The money that is being paid in rent could be used to pay a mortgage instead. If you do decide that buying is something that you can consider, based on your lifestyle needs and the ability to afford it, then doing so from a younger age would be beneficial as you will get a head start and be able to pay off the mortgage sooner. It's a little sacrifice early to get a larger benefit in the future'.
And there are many other benefits to home ownership that the Financial Blogger cited, to include security and control over your living situation and the ability to customise your living space to suit your needs. What's more, 'persons who own their home do not have the threat of being evicted by a landlord looming over their heads or the threat of increased rent, which landlords have the right to raise by 7% each year' she adds.
Millennials often complain of carrying the burden of expectations. That by a particular age they are expected to 'have it together'. When it comes to buying a house though @MsGillyJ says it's more a matter of circumstances rather than age. 'If you start working from very early and are earning a steady and stable income then as soon as you have the economic latitude to be able to afford a mortgage in an area that's suitable for you to live in then start as early as possible! Think of it this way- a mortgage is usually 30 years long. If you want to pay it off by the time you retire then ideally you should start before you are 30. If you can't, then that is ok' she explains. So what are her Top 5 tips to prospective millennial homeowners?
- Save about 20% of the value of the purchase price to cover deposit, fees and closing costs.
- Do your research - Use a calculator like the ones on my website (financialcentsibility. com) to assist you with determine the payments and the fees.
- Shop around and use a real estate agent to help with the search (it doesn't cost you anything!).
- Use your NHT benefit if you have one! You will save a lot of money in the long run.
- If you are borrowing in excess of the NHT amount, you only have to visit your financial institution because they have a Joint Financing Mortgage Programme that processes your entire application, inclusive of the NHT portion.
She underscores that purchasing a home is a big commitment but emphasizes that the reward is even bigger. 'The commitment that you make now will pay off in the long run with the satisfaction of home ownership. Having a place to call your own, having creative latitude to design and modify your home and having an investment that you can pass on to your kids etc. is a reward that comes with sacrifice'.
Period.
Gillian Jackson is a financial blogger. For more tips and tricks on making that big move you can visit her blog at financialcentsibility.com or follow her on Twitter @MsGillyJ.
