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What to Know about Owning a Home While in College

Mar 23, 2017

As most young adults head off to college, they assume that they will need to stay in an on-campus dormitory or, at best, in an off-campus apartment or college housing. For some, however, buying a house while in college can be a great use of money.

It may prove to be a real investment that will set you up for financial success for the rest of your life. Be sure to make these four considerations before making payments on a house while you are in college.

Consider Your Credit Score


In order to be approved for a loan, you will need at least a good credit score if not an excellent one. The way to build a credit score is to have a credit card account or loan account open that has a low balance and that shows on-time payments. 

You will also need to prove income and have an excellent debt-to-income ratio. If you do not qualify for a loan on these terms alone, you may need to have help getting a loan by finding a co-signer.

Be Sure to Get Title Insurance


If you buy a home, be sure that the deed comes with title insurance. This is indemnity insurance in case foreclosures or other problems come up in the future with the title to your property. 

This could happen if the authorities discover that previous owners did not have full ownership of the home. If you are getting a mortgage through a lender, the lender will most likely insist that title insurance be on the home.

Consider Maintenance Costs


While owning your own home during college can help you save money on rent, you must consider the other costs of having a home. You will be paying for all the utilities yourself and will need to have the time and money to maintain the home both inside and out. 

If anything breaks down, leaks or quits working, you will be the one to have to foot the bill rather than a landlord. Be sure you have the money to cover these unforeseen costs should they arise, and the time it may take to fix these problems between classes and homework.

Earn Equity and Save Money


One of the biggest benefits of owning a home is the chance to build equity. As you pay down your mortgage and the longer you live in a home, you will build more equity. 


In addition, as a homeowner, you can find many ways to save money, such as by renting out a portion of the house if it is a multi-family dwelling, or by renting out bedrooms to other college students. In some cases, the rent you receive each month could cover your monthly mortgage payments.

Buying a house while in college is not right for everyone because many lenders insist that you have 20% of the cost of the home for a down payment. 

However, if you are able to get a loan with a good interest rate, you will find that the house will generally pay you back as you gain equity and consider using it as a rental even after you have graduated. With property in the right location, you may even find that you can make money off your college home as you live in it.


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