Some people choose to wait until after college to get into a home of their own, but there’s no shame in shooting for the stars. Stay ahead of the curve, and purchase your first home while you’re still in college. It may seem like a lofty goal, but it can be done.
If you have the drive but not the direction, all you need is a little knowledge. Take the time to read through this brief overview, featuring some useful tips for purchasing a home as a college student. Start planning your future today.
Establish and build some credit
One of the highest hurdles to clear as a young person purchasing a home is the credit requirements. You’re young, so you may not have an extensive credit history. The good news is that college will give you at least four years to get your credit up to par.
You will have to actively build your credit. Get one of your parents to name you as an authorized user on their credit card. Invest in your own secured credit card, and always pay your bills on time. These steps will help you move closer to a high credit score.
Learn everything you can about the process
The process of obtaining a home is one of the most complicated things you’ll do in your life. It will take a bit of studying to pass this test. Take the time to really dig into the steps you’ll take to purchase a home, so nothing hits you as a surprise.
Go into the process with your eyes wide opened, and make sure you get the best deal for your individual situation. You may even want to consider hiring a lawyer to shadow you throughout the process.
Start saving money now
It’s true that a mortgage loan will pay for the majority of your home, but you still need money to buy a house. Depending on your personal financial history, you could pay anywhere from 3.5 to 20 percent down on a home.
Take the time to consider all of the various ways that owning your own home will cost you money, before you decide that you can handle a mortgage payment. Your monthly mortgage payment is only the foundational monthly cost of home ownership.
The trouble you may encounter
One issue you should be ready to conquer is making sure your front-end ratio is up to par. Front-end ratio refers to the method lenders use to calculate whether or not you are suited for a loan.
Your front-end ratio is calculated by dividing your projected payment by your monthly income. The number needs to be 28 or less, if you hope to get a decent deal on a mortgage loan.
Consider finding a qualified co-signer
If you find that you are encountering several stifling issues along your journey to purchase a home, try finding a qualified cosigner. When you have another adult that has really great credit sign on the mortgage loan, you’ll have more options. The trick is finding someone who trusts you enough to put their name on the line.