5 Expert tips for a college student who is planning to buy a home of his own
Are you someone who is a college student with moderate level of student loan debt and who is planning to buy a house of his own? If you don’t owe huge levels of student loan debt and if you have some savings and a reliable job, investing in your home is something that you can try in order to enhance your personal wealth. We usually see a lot of coverage that is given to the slow rate of Millennials buying homes but there is no news of a graduate who has shown interest in investing in a real estate property. Student loan debt doesn’t have as bad an impact on your credit score as credit card or auto loan debt. However you have to ensure that you have the ability to repay the home loan on time after managing all your other payments. Here are some tips for the recent graduates.
- Pay down high interest debt: The higher are the interest rates on your loans, the higher is the priority that you should give to repay that account. If you owe a certain amount on your credit cards, take immediate steps to pay them down before the interest rates multiply and take a huge shape. The sooner you repay high interest debt, the sooner you can improve the chances of grabbing a deal on your home.
- Watch out your debt to income ratio: One of the biggest factors for people who don’t get a loan is a high DTI ratio. When you have too many debt defaults in accordance with your income, you will have a high DTI ratio and this is when the mortgage lender won’t allow you a loan at an affordable rate. Being a student, this can become a big hurdle and hence you should decrease your debts in order to reduce your DTI ratio.
- Research for low down payment programs: Chances are high that if you’re paying down your student loan debt, a major portion of your income is set aside for those payments. Then how would you pay down for a mortgage loan? This is when you should research for the low down payment mortgage assistance programs like the FHA loans where you can get a loan with very little down payment.
- Look for distressed properties: If you’re young with very little assets, a distressed property that needs very little renovation can be a good choice for you. Although you should remember to consider the costs of renovation yet even after calculating them you can be sure of saving money rather than buying a new home.
- Make wise buying decisions: Above all, you should purchase a home that is going to make you money and not just get a home that you can afford. Know the buyer trends and then get a home that will help you earn money in the long run rather than become a burden.
Manager of Marketing Department of Essay-on-time.com shares tips on how a student should buy a real estate property of his own despite owing money on student loans. Take into account the above mentioned advice if you’re a student planning to buy a home.