Many people dream of living an independent and fulfilling life soon after graduating from college. The primary wish of recent college graduates becomes to land a dream job and start a successful career. After gaining some form of financial stability, the next move is to own a home. This is certainly a great decision to make.
However, since owning a home is one of the biggest financial decisions in a lifetime, it requires diligence considerations. From budgeting for the home to adopting proper maintenance culture, here are some home buying and maintenance tips for recent college graduates ready to purchase their first home.
The true cost of a home
Before buying a home, you should know the true cost of owning a home. Owning a home is much more than taking a mortgage loan or paying for it in cash. Cut all the fantasies and illusions about owning a home and let’s get real. Buying a home is an unending investment. There are several costs and expenses you will incur after making the purchase. This may include utility bills, property tax, homeowners’ insurance, home warranty, and special assessment for an HOA.
Maintenance cost is another important expenditure that adds to the true cost of a home. A house needs frequent maintenance to be in a good shape and maintain or raise its value. You will also need to have servicing and maintenance schedules for your home systems and appliances.
Says, Cinch Home Services, “This requires a certified and experienced specialist who provides service and repair for appliances and HVAC systems, and that also comes with a cost. So, college graduates looking forward to purchasing their first home must factor in all these costs before taking a decision.”
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Tips for buying a home as a college graduate
If you are still here, it means you’ve factored in all the aforementioned, and are ready for your first home. Well, here are some important tips as you go into the real estate market.
Consider your income
How much you earn in a month plays a critical role in your ability to own a home. As a recent college graduate, you may be owning a student loan that needs to be paid. That aside, you have personal expenses to make, which will also be coming from your salary. Certainly, you will also be considering a mortgage loan to finance the house. So, with your current earnings, will you be financially stable if all these expenses and loans are deducted?
Have a budget
Before going on house hunting, know how much you can spend on a home. Your budget should reflect your income, monthly expenses, and other monthly financial obligations. You should also consider other mandatory payments like a down payment, closing fees, and others associated with buying a home.
Get a mortgage pre-approval
Mortgage preapproval helps you to know the maximum amount of money a mortgage lender can lend you. The process included the lender reviewing your financial status, including creditworthiness. You need to submit your loan application, and supporting documents including, assets, proof of income, employment history, credit history, etc. for the lender to evaluate. If you qualify for the loan, the lender will issue you a pre-approval letter stating the maximum you can receive and the associated interest rate. This helps you to know how much you can spend on the real estate market. The mortgage pre-approval will also help you to adjust your previous budget.
Go for affordability
For the sake of financial stability, you wouldn’t want to add more loan burdens to your existing student loan and others. Therefore, go for an affordable home, which wouldn’t burden you financially.
As a first-time homebuyer, it is advisable to go for a condominium or a starter home. These are very affordable homes compared to other options. To be on the safer side there are several things to look out for in the starter home before making a purchase. It should be a well-maintained home or require less maintenance to avoid unplanned expenses.
Consider the location
Location is critical when shopping for a home, as it can affect the cost. Determine, where you want to live and research the neighborhood. You may want to consider the proximity of the area to your workplace, availability, and access to amenities, crime rate, etc.
Hire a real estate agent
Being a first-time homebuyer, it is critical to work with a real estate agent when buying a home. Of course, you can do your own home shopping and complete the deal yourself, however, some sellers take advantage of first-time buyers and you may end up paying more.
A good real estate agent can help you negotiate, and lead you through the paperwork. Some agents also provide services like home inspection, so you wouldn’t have to do it yourself. A home inspection is very important, as it helps you to physically confirm whatever the seller claims the home is and has.
Conclusion
Buying a home is a big decision, which can have serious consequences on your finances. Therefore, it is critical to make an informed decision based on your financial strength, and long-term goals. Always consider the best options available.
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