Buying First Home Right Out Of High School Or College
This article is about Buying First Home Right Out Of High School Or College
Gustan Cho Associates Mortgage Group often gets inquiries about recent high school and/or college graduates buying first home right out of school.
- There are many talented graduates who often get attractive employment job offer letters
- Rents are going up every year
- Often times it costs less to own a home than rent an apartment
- Many people in the late teens or early 20’s, buying first home may seem like a dream
- However, buying first home is not as difficult as many believe it is
In this blog, we will discuss Buying First Home Right out of high school and/or college without any work experience.
Housing Market Today
Many millennials and younger people are making a larger percentage of the home purchase markets. Millennials are the largest group of homebuyers in the U.S. today. Unlike in the past, many homebuyers are single without any children. There are cases where many who get engaged and married have their own homes. They often keep one home as a rental or sell and move into their main home. Those younger folks who are buying first home at an early age are developing equity. A home is the best investment one can make. It is an investment that comes with many benefits. Many millennials are jumping in to a hot housing market.
Julie Hayward, a licensed Illinois real estate agent and contributing associate editor with Gustan Cho Associates said the following about buying first home by younger home buyers:
Homeownership also means Consistent, reliable payments – There is no more annual rent hikes from your shady landlord. More control to customize the property – Forget “accent” walls. Paint, upgrade, renovate and do whatever you want to your home once you own it. Great credit – Getting a mortgage loan at a young age can help you establish a solid credit history, which means a good credit score and ample financial opportunities later on. Tax benefits – Homeownership comes with several tax benefits that can lower your tax burden and increase your annual refund. Homeownership means savings on monthly costs. Rents have been skyrocketing in most major cities in recent years, with the average mortgage payment coming in well under the average rent. You also have the option of renting your property on Airbnb or other similar sites to make extra cash as needed.
How Old Do You Need To Be To Purchase Home
Minimum age to purchase a home and qualify for a mortgage is 18 years old.
- Granted, most 18 year olds main priority is not buying first home. However, there are many motivated 18 year olds whose goal is buying first home as soon as they can and can afford it
We will cover more in buying first home for recent high school graduates and/or college graduates.
Things To Consider Prior To Pulling Trigger In Buying First Home
Buying first home is a huge deal. Lots of thoughts and considerations need to go into buying first home. We will go over buying first home considerations for younger first time home buyers. Homeowners cannot instantly move to a different location in a moments notice. If you are anticipating in moving often, a home purchase may not be the best interest. One example is one of our borrowers who just purchased a home in Chicago but had a job transfer to Southern Illinois. The client first job right out of school was that of an Illinois state trooper. He purchased a home in a suburb of Chicago. Within a year, he got a transfer to Springfield, Illinois. Luckily, he was able to rent his home and qualify for another FHA Loan for another home purchase in Springfield, Illinois.
Here are some factors that need to be taking into consideration:
- How long are you planning on staying in the location of home purchase
- If planning on moving within five years, a home purchase is not recommended
- It will take at least three years to recoup closing costs and fees from a home purchase
- How established are you on your job?
- Will it require a transfer?
- Is the job solid where there will not be a layoff?
Qualifying For Mortgage With No Past Work Experience
In general, all loan programs require a two year past work experience. However, home buyers can qualify for home loans with no work experience as long as they have been full time students for the past two years. High school graduates can qualify for a mortgage if they can provide two years full time education experience. College and/or technical school graduates can qualify for a mortgage if they have been in school for the past two years with no work experience. Lenders treat full time schooling the same as two years work experience. You do not need a degree to qualify. If a high school student has been a full time student for the past two years and did not graduate, they are eligible to qualify for a mortgage. Same with college and/or technical schools. If a student drops out of college and/or technical schools without earning their degrees, they are eligible to qualify for a mortgage as long as they have two years as full time students.