Many millennials are open to moving back to their parents’ houses after college. But for some, moving home may not be a viable option. This is leading recent college grads to a fork in the road: should I rent or should I buy? With renting costs continuing to rise, many recent graduates are deciding on the latter. Here is your unofficial guide to home buying!
What does the future hold?
It can be very daunting to map out the next 10 years of your life just as your tassel has been moved to the left. Impulsive decisions should be left in the dorm room and recent grads need to plan where and what they will be doing before considering buying property. Thinking like a real estate investor rather than making emotional or rash decisions can help guide the thought process.
Before college grads think about buying a home, they should have both a stable job and firm plans to live in the neighborhood for at least the next five years. If a recent grad is cemented and secure in their current location then they should talk to several mortgage lenders (starting with their bank) about their loan qualifications.
Buying your first home is a huge decision, so all the factors together can become overwhelming. However, if you are mentally prepared to take the journey then you need to be certain that your wallet can handle the weight as well.
Plan, Plan, Plan
Before you even think of picking up a pen and inking a deal for a mortgage, it’s important to be aware of your financial standing. With technology, budgeting has never been easier. There are a slew of apps for smart phones that are tailor-made for budgeting and planning your finances.
In addition to knowing the precise state of your finances, it is important to know your credit score — visit AnnualCreditReport.com. This is the only site that’s federally mandated and an authorized source for a free credit report.
Once you know your score you can decide what next steps. If it’s too low to even apply for a home loan (anything below 580), it’s time to get your credit in order. You should open up a credit card and pay it on time and stay on top of your student loans. Your mortgage lender can also help determine a course of action.
Many new buyers also don’t factor in the hidden costs of buying their first home. As well as the down payment on the property, there are also appraisal charges, closing costs, taxes, insurance and property inspection fees.
Much like school itself, the best thing a recent college graduate can do is their homework. As long as you think with a clear head and have a healthy financial standing, you could soon be hanging that fancy diploma in your very own home.
Give one of our agents a call if you or someone you know is contemplating their first home purchase!
Courtesy of RISMedia 2016