Buying a home will most likely be one of your biggest purchases, and becoming a homeowner is a lot like getting a college degree, it requires discipline. When purchasing a home, you should make sure the home caters to your current needs. Just because you’re a recent grad doesn’t make the dream of homeownership impossible to achieve. If you recently graduated from college, and want to become a homeowner, read some guidance from our experts for first-time homebuyers below.
The Costs of Homeownership
The median sale price for a home in the United States was $374,900 during the second quarter of 2021, according to The Ascent. Looking at the median price range for all types of housing in the DC area was $691,997 in June 2021. If you are looking around Frederick County Maryland, you’ll be able to find more affordable housing than if you were looking in Northwest DC.
Another cost you need to factor in, and ask with each listing, is the cost of utilities. Utilities are sometimes covered in apartment rent, and you will need to factor in those monthly costs as a homeowner. There are things you can do to keep those costs down such as picking a newer home which is more energy efficient. If you love the charm of older homes, you can make them more energy efficient by changing out appliances, windows, and having more insulation put in.
Do You Qualify for a Mortgage?
We always recommend getting pre-approved at the very beginning of your homebuying journey! This will allow you to stand out from other offers. Additionally, when you apply for a loan, you’ll need to make sure you’re employed, or can show that you have a form of steady income – the length of employment required will depend on a number of factors. You also need to make sure your debt-to-income ratio meets guidelines. Talking with a mortgage professional will help clarify such things.
Are you worried about getting qualified for buying a home?!
Adding a co-borrower to your mortgage could improve your chances of getting approved for a mortgage. This person should have great credit, a steady income, and know that they are also liable for all payments. Typically, this person is a parent or financially stable relative that you can trust, and you have shown can trust in you.
Many recent graduates are faced with sizable student loan debt. Whether this debt is deferred or you’re making payments, it’s always advisable to pay down your debt as soon as you can once you have steady income. If you decide to defer your student loan payments until after graduation, that debt will affect your credit profile, whether payments are deferred or even if you’re on a payment plan. You need to keep in mind that when you’re ready to apply, your Mortgage Banker will look at your debt-to-income ratio, and your student loan debt will be factored into the equation. If you are paying your student loans on time, this can help create a positive credit profile.
If you have good credit, and a steady income source, buying a home as a recent grad might be a wise decision for your goals. When you purchase a home, you are gaining future equity which could help you pay down your student loan debt or provide the assets to help move into your next home as your needs change. There is a lot to consider when purchasing your first home and moving into your next stage of life. Connect with our team today to see if you are in the right position to buy a home at this point in time.
Topics: Mortgages, Credit, Applying For A Mortgage, Qualifying For A Mortgage, First Time Homebuyer, Housing Market, Buying a Home, benefits of homeownership, Homebuyer, millennial homebuyer, Buying Home During COVID-19, Mortgages for Millennials, student loan payments