OUR CAPE COD HOMES TEAM - EXIT Cape Realty



Posted by OUR CAPE COD HOMES TEAM on 10/10/2017

For most college students and recent grads, the prospect of buying a home seems slim and distant. With the cost of a college education growing each year and the price of houses inflating, it can seem daunting to begin to save for a down payment or build credit.

 However, there are ways to start planning now for buying a home, even if you are burdened with student debt and rising rent.

 In this article, we’re going to do just that. If you’re a recent grad or a current college student, read on for a guide to buying a home.

What do you need to buy a home

Once you graduate college you might be wishing you could have taken an elective called “How to Be an Adult 101.” There are many personal finance problems in life that just aren’t taught in school, from saving for retirement, to borrowing for a house or car, to investing in stocks and bonds.

So, what are the main things you’ll need to buy a home? Before you start applying for mortgages, you should know that just because you can get approved doesn’t mean you should buy a home.

Purchasing a home is a huge investment and one that most homeowners take decades to pay off. With high interest rates and private mortgage insurance (PMI), the cost of owning a home can be immense.

To avoid PMI and get a good interest rate, you’ll need a few things.

Credit score

Your credit score is one thing that lenders take into consideration when determining how risky it is to lend to you. They want to know that they’ll receive a return on their investment and that you won’t stop paying your mortgage. A good way to gauge this is by looking at your financial history.

Your credit score mainly takes into account the following five things:

  1. Payment history - 35%: Do you pay your bills (utilities, loans, etc.) on time each month?

  2. Credit usage - 30%: How much of your maximum credit have you used? If you max out your cards this can reflect poorly on your ability to manage money. However, if you don’t use any accounts you might have a hard time building a payment history.

  3. Length of credit history - 15%: The longer you’ve been paying bills the more trustworthy you are to lenders

  4. New credit - 10%: If you recently opened or attempted to open cards this will temporarily lower your credit score as it could be a sign of financial duress

  5. Types of credit - 10%: store accounts, credit cards, loans, etc. Having a variety of credit types will boost your score.

Having student loans as a college graduate can often give your credit score a leg up on others who don’t have a credit history. However, to boost your score you’ll want to keep making on-time payments and consider using a credit card if you can afford it.

Employment history

Most recent college grads cringe when they hear that their employment history is important to lenders. However, you might be pleased to know that being a full-time student is something lenders take into consideration.

They will, however, need to see employment history from your current employer, and the more you can prove that you have a stable job the better.

Down payment

One of the most important things you can do right now is to save for a down payment. Designate a portion of your paycheck each week to a separate savings account if you need to in order to hold yourself accountable. The bigger down payment you can make, the better your interest rate and the more money you’ll save over the length of your mortgage.

Finally, don’t let increases in your salary change your lifestyle. Staying frugal will help you avoid “lifestyle inflation” or spending more simply because you make more. Decide what you value, and choose purchases wisely.




Tags: College   home buying  
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Posted by OUR CAPE COD HOMES TEAM on 4/5/2016

Businessman with city viewThere are many reasons you may find yourself in a new city or state, far from home and your comfort zone, possibly even your family and friends. Whether you’ve decided to close the gap between your long-distance-relationship, were transferred to a new city by your company, are uprooting yourself for the college or university of your dreams, or are simply seeking new opportunities and fresh faces, getting familiar with a new community be disheartening. As a real estate agent, I see this often. Meeting new people and becoming acquainted with a new area may be easier if you follow some of the suggestions I offer to buyers new to any given area: Put yourself out there. Most towns and cities find ways to encourage their residents to come together as a tight knit community, in fact some cities may even have a planning board or association dedicated to this. Many areas may have outdoor venues and pavilions for varying activities such as free concerts or even large group work-outs. Keep an eye out for any mixers or activities in your new neighborhood. Pick up a hobby! If you’ve recently moved to a new city surrounded by water try out kayaking! Find something you enjoy and you will more likely than not find other like-minded people out and about practicing the same hobby. If you’ve moved to a city or area where walking to and from varying destinations, walk! If you’ve moved to Boston, or a city similar to Boston, try walking to work rather than taking public transportation. This is a great way to get situated in a new area. Not only will you learn the different roads and geography of your new city, you may find a hidden gem off the beaten path that you would’ve never noticed otherwise. Which leads me to my next suggestion: Seek out hidden gems! Sometimes small businesses, gyms, pizza places, and coffee shops are the best way to meet people and get a feel for the residents of a certain area. Look for smaller establishments and you’ll be sure to find a very serious group of ‘regulars.’ This is another good way to fit into the community and a good way to meet people. Plus you’re experiencing all your area has to offer rather than dining at or hanging around corporate locations you can find all over the country! If you’re moving to my area from far away, I’d be happy to walk you through the change as your real estate professional!