Jul 05, 2021 09:08 AM EDT
Is It Possible To Buy A Home After College?
Nine out ten homeowners and 75% of non-homeowners believe that buying a home is part of the American Dream. Unfortunately, for college graduates, who have an average debt of $28,000, it is difficult to secure a home and pay for it. Low incomes, lack of credit history, and rising college debts make home ownership a distant dream. Putting off home purchase is the standard recourse for a lot of people. The good news is that it's still possible to become a homeowner after graduating if you plan it properly. With meticulous and intensive preparation, you can purchase a home after getting your degree.
Plan And Start Making Money Early
One of the first things to plan for is to decide where you want to live and what type of house you would like to own. Aligning your career and the place where you want to live also make sense. After all, if you want to become a software engineer, you probably don't want to live in a rural area where you can't find work. In addition, it's critical that you also get a well-paying job, or even work to put yourself through school and limit the amount of loans that you have. Getting rid of debts is also a priority if you're ever going to get on the path of becoming a homeowner.
Study the mortgage options that are available to you as a young graduate. To qualify for a loan, you must also have a good credit score, and must raise enough money to meet the down payment requirements. Remember: there are many traps in loan financing that could end up costing you a fortune, or at worst, prevent you from getting out of the debt trap. Therefore, it makes sense to look at the terms of financing and review them periodically to ensure that you're getting the best return for your money and can pay off your debt at a faster rate.
Get Help From Family Or Federal Programs
First, before even considering a loan, it's critical to establish your budget and decide what you can realistically afford. Why buy a big home with all the trimmings that you don't need if you're alone or with only your partner? Opt instead for a starter home that's within your means, and live with this. To avail of assistance, you will likely turn first to your family or friends for a loan. Do keep in mind that there are also several federal assistance programs that you can tap into. For example, the Delaware State Housing Authority (DSHA) launched its Homes for Grads program for young graduates in 2019. Under the scheme, the DSHA offers down payment assistance and settlement assistance for buyers who graduated with a four-year degree or more in the last three years. Other important schemes to consider include the US Department of Housing and Urban Development (HUD) for affordable housing, and the Federal Housing Administration (FHA) for home loans with a smaller down payment and lower interest rates.
Owning a home after graduation is, indeed, a challenging task. However, if you plan it in advance and work towards achieving your goals, it is possible to purchase your first home after college.
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