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Match Your Home Finance Approach To Your Stage Of Life

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real-estate-basicsAs A Borrower, Either Millennial, Gen-Xer or Baby-Boomer Be

There are three distinct stages in a homeowner’s life. Let’s call them Millennial, Gen-X, and Baby-boomer, and while these terms imply distinct generations you can think of them as a series of financial stages that lead one to another, ascending the ladder of wealth.

Arguably, homeownership proceeds in stages because it is all about building and managing wealth; wealth itself is about having the lifestyle you have earned from the accumulated rewards of hard work. In the United States of America, owning your home is still one of the most significant factors associated with financial independence and membership in the middle class.

Financing for The Millennial Generation

If you are at the leading edge of the millennial generation, you are likely to be finished with school and starting to build a career. Now that you have gotten the travel bug out of your system paid down the majority of your student loans, and your career is on track, you might start to look around and get a home of your own.

As a person with just starting out, you might wonder if you are better off renting or buying. Once you decide that ownership is the right choice, you will have to start taking your credit history seriously and make an effort to get qualified for your first home loan.

Fortunately, first-time homeowners are reasonably well served by programs intended to get you into your first home. If you don’t have the savings to make a deposit of twenty percent or more, an FHA loan will facilitate making a small down payment, but that will add costs to your borrowing, this is an institution that has helped generations of Americans buy their first homes. If you are a veteran of the United States military, you might qualify for a Veterans Administration loan with even more generous terms.

Mid-life Gen-X Financing Options

You have bought that first home; you have paid down the loan balance and maybe the house of condominium is looking a little too small now, you have a career that is expanding and a two-income home. If you made it through the last decade with your assets intact you are in a good position to move up, you might decide to move up to a luxury home in an exclusive neighborhood.

With a low level of debt relative to the equity you hold in your assets, you can qualify for a jumbo loan unrestricted by the limits imposed on conforming loans, loans that fall within the limits set by Federal regulators on mortgages to conform to FHA and other government-backed lending programs.

Once your big move is behind you, maybe it is time to start expanding your assets. Do you dream of buying a vacation home or a rental property as an investment? Buying a second home or a rental unit could be a convenient and enjoyable way to increase your wealth.

Baby-Boomer Asset Consolidation Financing

You are in the stage of life when you want to consolidate your assets and downsize and focus in preparation for retirement. You may be wondering about how to get more out of your investment properties, reinvesting your gains or just converting to cash. These are questions that you need to work with your financial advisors and your family. Borrowing against your assets may not be the best choice if you have built up a large nest egg. However, holding a moderate level of debt could be financially efficient if you can take advantage of the tax deductions relating to interest.

All three stages have variations and creative possibilities and if you have a plan you can make each of the first two stages flow on to the third. Real estate finance still offers the American public the opportunity of ownership and advancement; it can bring a more comfortable and exciting lifestyle for those who are motivated to take advantage of it.

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Trace Richardson has written 638 articles on BankChirp.com

I'm Trace Richardson and am the founder of LeadPress. I’m a licensed California Real Estate broker and a former equities trader previously holding the Series 7, 63, 55 and 24 securities licenses.

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