College is a great time to consider the future and where you want to live after you graduate. Creating a plan for buying a home helps you avoid common shortcomings that prevent buyers from getting better mortgages. Preparing for homeownership after college helps you get started as early as possible.
Identify How Much Money You Will Need
A pre-approval can give the consumer an idea of where they are financially and determine how much they can expect to get from a mortgage. The consumer uses the information to calculate how much money they’ll need to purchase a home. First, they must define a price range based on the property dimensions they need. Next, they receive home prices for properties that meet these needs. Finally, they calculate the down payment. The down payment could range between 3.5% to 10% of the total mortgage value.
Explore Ways to Save Money More Effectively
Setting up a budget helps the college student generate enough money for a down payment for a new home. They can cut their expenses and place a portion of their paychecks into a savings account each pay period. The student could also save any funds they receive from a stipend check and deposit it into a savings account. Since they are a first time buyer, the college student might have a chance to participate in a first-time buyer’s program when purchasing a home. College students can contact Dustin Dimisa today to create a plan for their future home purchase.
Establish a Work History before You Graduate
Most lenders require the borrower to have a history at their current employer for at least two years. College students can get jobs in their field during their junior year of college. Securing even an entry-level position helps them get their foot in the door at a great organization. All they must do is establish a two-year history when getting the mortgage. This doesn’t mean they cannot change jobs after they get the mortgage.
Maintain Your Credit Scores
College students receive offers from creditors such as credit card companies. This is a great way to establish credit and obtain higher than average credit scores. The college students should pay close attention to interest rates for any accounts they open when in college. If the interest is higher, the account could increase their income-to-debt ratio and prevent them from getting a loan.
If they don’t pay their payments on time it will present them with negative listings on their credit history. This could count against them when they apply for a mortgage. The applicant must maintain their credit scores and avoid higher than average debts. A nice balance of accounts in good standing can give them more leverage when getting a mortgage.
Home buyers create plans as early as possible to buy a home and get the best mortgage possible. Saving money for a down payment simplifies the process and enables buyers with lower credit scores to get a loan. College students can create a plan for buying a home after college with their preferred lender now.