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Here’s how much American Millennials are putting down on homes

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American Millennials are using their savings to fund a downpayment but most end up putting far less than the standard 20 percent down, according to the recent 2018 Consumer Housing Trends Report by the listing site Zillow.

“Even if you don’t have plans to buy a home in the next year or two, it never hurts to start setting aside savings for a future home purchase,” said Aaron Terrazas, Zillow senior economist, in a statement.

The 2018 Consumer Housing Trends Report analyzed American homebuyers both nationally and in five major metro areas – Atlanta, Chicago, Washington, DC, Phoenix and San Francisco – and their decisions about their down payments, including how much they put down and how they funded their downpayment.

Although 20 percent down is the accepted industry standard in the mortgage business, just 43 percent of buyers nationally said they put down 20 percent or more when purchasing. Some 24 percent of all buyers said they put down 5 percent or less.

Of the buyers surveyed, Millennials were the most likely cohort to put down less than 20 percent.

“If a seller has three offers, one with 25 percent down, one with 20 percent and one with 3 percent, which offer do you think they’ll accept,” asks Bridget Harvey, a licensed real estate associate with Douglas Elliman.

Buyers in Atlanta were more likely to put down 5 percent (or less) than they are to put down 20 percent or more compared to the other metros included in the study.

Larger downpayment amounts not only make prospective buyers more appealing to the banks but can have other significant financial benefits as well — like staying above water on your mortgage.

“Putting 20 percent or down keeps the monthly payment lower by saving on interest and the added burden of mortgage insurance,” Zack Tolmie, a home lending officer with Citibank, tells Livabl.

Zillow estimates that it could take the typical buyer around seven years to save enough for a downpayment. But in some pricier markets, like San Jose, CA, it could take over 20 years for buyers to save the $200,000 needed for a downpayment.

Overall, most buyers are using their personal savings as a funding source of their downpayment. Nationally, 70 percent of mortgage buyers used at least “some” savings for their downpayments.

And in the five major metros Zillow examined, the share was similar or even greater: 82.5 percent in San Francisco, 79.2 percent in Phoenix, 78.8 percent and Washington, D.C., 75.3 percent in Chicago and 73 percent in Atlanta.

Other popular sources of funding were a previous home sale, gifts, and liquidation of investments or stocks.

And for Millennial buyers — the largest cohort of buyers and the most likely to use multiple funding sources for a down payment — about half used a gift or loan from family or friends for at least part of their downpayment. Gifts and loans accounted for around one-fifth of the total downpayment on average.

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New home? Prepare for the unexpected

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(NC) Buying a house, getting married or having your first baby are all major life events that are likely to affect your finances. But whether you’re in the midst of a major life event or not, it’s important to check in on your finances regularly to maintain good financial health.

Your financial health encompasses things like your spending, savings, borrowing and future financial plans. It also means dedicating a set amount of savings for unexpected future events. It can even include optional credit protection insurance, such as TD protection plans, to help cover your debt balances in case of death, a covered critical illness or total disability.

Even though it can be tough to think about the unexpected, life is unpredictable and it’s important to plan for the unexpected. Find more information at td.com.

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Mortgage pitfalls to avoid

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(NC) Throughout life, you may have moments where you’ll make a large purchase or invest in a costly item, like your family home. But whether you’re in the market for your first new property or already have a mortgage, leaving this asset unprotected can be costly.   

Insuring your housing financial debt, as well as debt for other big-ticket items like a new boat for your lakefront cottage or keepsake jewelry like an engagement ring, is a smart investment in your well-being.

To help protect your debt balances like a mortgage, your bank may have optional credit protection insurance products.

“Your home is one of your biggest assets, yet illness can happen at any stage of life. Worrying about your mortgage when the focus should be on health isn’t a situation anyone would wish for,” explains Shirley Malloy, vice president at TD. “Fortunately, we offer mortgage protection to provide coverage for your outstanding balance should you face a covered critical health event.”

Mortgage protection can be purchased whether you’re in the process of applying for a mortgage or already have a home financing solution. But what about protection options for credit card debt?

“Given the unprecedented circumstances of this year, many Canadians are trying to plan for the unexpected to protect themselves and their finances,” says Malloy. “TD balance protection plus is an optional product designed to help you deal with your credit card payment obligations in the event of a covered event, such as loss of employment.”

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Is your internet too slow? It’s probably not you

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(NC) We all know the aggravation of a school lesson that just won’t stop freezing or the family video call that looks more like a photo montage. And, as we adjust to the impact of COVID-19 on our day-to-day, that slow connection can have frustrating consequences.

Working from home and learning remotely, both need fast, stable internet, something not enough Canadians have yet. Even if you have fast devices in your home, if the infrastructure in your area is not optimal, your connection won’t be either.

Right now, cities have the infrastructure needed to ensure access. But rural and remote communities are hugely underserved, with fewer than half having high-speed internet, and fewer than a third of households on reservations have high-speed connections.

Fortunately, change is coming. The Universal Broadband Fund is backing projects across Canada right now to ensure the reliable, high-speed internet connections families need to work, study, access services online, and safely stay in touch with each other.

The fund existed before COVID, but as a response to the pandemic, its timetable has been moved up by four years to a target of 98 per cent of Canadians with high-speed internet access by 2026. With the faster pace, at least 90 per cent of us should be connected by the end of 2021.

The fund is focused on improvements in rural and remote communities across Canada to fix the disconnect between internet access for urban and rural households.  This means more remote work opportunities, better access to remote learning and safer access to healthcare, no matter where you live.

It’s not just for good connections at home, either. The improvements mean much better access to mobile networks on highways between remote communities. The result is better, safer navigation and access to emergency services for your family, even on the road in the middle of nowhere. Mobile projects will be focused on serving Indigenous communities and the roads leading to them.

The shape these improvements will take in your area will depend on where you live. Canada is huge, and its communities are hugely diverse, with diverse needs. Keep an eye out for local projects — they’re a small part of something much bigger.

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