Majority of Millennials to Buy Home with Credit
The majority of millennials plan to purchase a home with credit, according to a recent survey of Americans and their credit behavior commissioned by BMO Harris Bank. The survey found that 81 percent of millennials will use a line of credit versus a mortgage or loan when purchasing a home, differing from attitudes expressed by the Sandwich Generation.
Millennials expect to turn to credit for other major future purchases, as well. When financing their entrepreneurial goals, 63 percent will primarily use some form of credit. Millennials were also more likely to use credit when paying for a wedding (29 percent) and to finance a big vacation (32 percent).
"It's not uncommon to use some form of credit for the major purchases in life,” said Alex Dousmanis-Curtis, Head of Retail Banking, BMO Harris Bank. “What's most important is having a plan in place before making the purchase of how you're going to pay it off. If it's on a credit card, sporadic, large purchases may harm your credit score by tipping the balance on your credit-to-debt ratio, which should stay under 35 percent. Interest accumulation is another factor to consider.”
Millennials relying on credit should follow these guidelines:
Source: BMO Harris Bank