After college will I be ready to buy a home? The time is soon coming when I will graduate and start working full-time. I have heard financial advice saying I should buy a home as soon as possible since homes are investments that will always appreciate in value, but am I ready for such a big step? In trying to decide whether or not I am ready to buy a home I researched the things a person needs to consider before buying a home. These questions were useful in making my own decision and can be implemented in your life when making the decision to buy a home or wait.
What is my credit score?
Something you definitely don’t learn about in college is the importance of your credit score. Throughout college I received numerous credit card offers, but not once did I receive unsolicited advice about my credit score. This is a shame because my credit score plays a major deal in
If you have just graduated you probably won’t have extensive credit, or a great credit score. This is a major thing to consider when thinking about buying a house because your credit score will affect the rate of your mortgage. Credit scores below 600 will receive high rates that cost you a ton of money in the long run.
Do I have a down payment?
The no money down plan for buying a house has been popular in recent years but that fad is fading as mortgage companies face an unsteady market. In the current market it is very important to have a down payment, preferably 20% of the home’s purchase price. You can use a smaller down payment but you will have to take out private mortgage insurance that can cost thousands. The need for a down payment makes it hard to consider buying a house right out of college because chances are you weren’t saving much during those four years of school. If you have saved during school and have additional financial help from family members you may still consider buying a house your first year out of school.
Can I make the monthly payments?
Basically this question boils down to: do I have a job I can count on? A monthly mortgage payment will require a steady income. Before you sign all the papers you need to consider your job stability. If you plan on doing something a bit risky like freelance work you may not want to buy a house right away because getting started in your career could take time. If you want to make sure you can make the payments consider getting roommates or taking on extra jobs. When considering my own case I considered getting a roommate or two or letting my brothers move in to receive rent and parental help since they are still in college.
Do I want to be tied down for the next few years?
Buying a house and taking on a large mortgage limits your mobility right out of college. I travel often and it is one of my biggest concerns when considering buying a house. Will I be able to travel? If you want to explore the world or even be able to pursue job opportunities in different cities, buying a house might not be for you. If you don’t plan on being in the same city for at least two years then buying a home is probably not the right decision. But if you have found the perfect area and see yourself living there for many years then you might consider planting roots by buying a house.
There are several other things to consider when thinking about buying a house after graduating. Before you go any farther you should consider these four things and decide if renting is a better solution for your situation. These basic tips will help you test the water before you dive into the more in-depth process of looking for a house.
