I know what you’re thinking, you just received your diploma and may not even have your first job lined up prior to graduation yet, so isn’t thinking about buying a home a bit premature?
My answer to that question is a big resounding NO.
Now is the best time to start investing into your future; the sooner the better. I don’t mean today is the best time to go out and purchase your first home, but what I am saying is that you should be thinking about the cost of a home and mortgage and begin prepping financially.
Buying a new home takes money so it’s best to be proactive.
Before we talk about saving for a house, we must first mention the dreaded topic many new graduates have pushed towards the back of their mind. Debt. 66% of new graduates from public institutions are graduating with some amount of student loan debt. That’s reality. Carrying student loan debt doesn’t automatically disqualify you from homeownership, but you will need to create a loan payment schedule in order to reduce your debt to income ratio.
Next on your financial prep checklist is building your credit history. Responsible use of credit will be important when applying for a mortgage loan. If you’ve had credit before and made some errors or have never had credit, now is the time to start cleaning up and building. Pay off credit debts and use a card or small auto loan to make regular payments that show you know how to handle money and make wise decisions.
Eventually in your near or far future you may want to put down roots and purchase your first home, and the steps you take now while you’re young will set you up for the best possible scenario in your mortgage and home options.