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Financial Tricks to Affording Your First Home After College

Mar 9, 2018

The decision to buy your first home after college can be both exciting and confusing. The special jargon of real estate, the flood of documents and the many legal requirements can be overwhelming. One of the primary considerations is price and your ability to manage mortgage payments and other expenses. You can make the experience of purchasing your first home easier and more affordable if you follow these five tips.

Clean up Your Credit Record

A squeaky clean credit record will help you to get the best interest rate on your mortgage, so take care of any problems you may have left over from an earlier period of your life. If you don’t have a credit record, establish one with a credit card or department store card and make your payments on time.

Put as Much Money down as Possible

Remember that the greater the amount of your down payment, the less money you will have to borrow, and the better interest rate you will receive from your financial institution.

Special mortgage programs are available that require as little as 10 percent down, but you should try to put at least 20 percent down on your purchase to acquire as much equity in your home as possible.

Get Pre-Qualified for a Loan

Seek out a number of financial institutions to try to get the best interest rate, and go through the pre-qualification process. This action will give you an advantage when looking for desirable properties that could get snapped up quickly.

Put off Big Purchases

Your new mortgage payment may be bigger than your previous rent, so you should try to arrange your finances to accommodate this larger expense. Sit down and see where you can cut your expenses to make paying a mortgage payment easier. Put off large purchases, such as a car or furniture until a later date, after you have gotten settled in your new home.

Choose a Home That’s Affordable

A number of mortgage calculators are online that can help you determine how much you can afford to pay for a home. Stay within a narrow range of this amount, and avoid the temptation of buying more house than you can reasonably afford. A good real estate agent, like Re/Max Alliance - The Diane Stow Team, can help you find the right house for your needs.

Purchasing your first home is one of the biggest financial steps you will make in your life. You can help it to be a success, and the perfect launchpad for other financial decisions, if you learn as much as possible about owning a home, in advance of your search. These five tips will help you to position yourself for this important life event.

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