It’s not considered commonplace for a new graduate to purchase a family home right out of college. For the most part, students have already incurred too much debt to take on an expensive mortgage right off the bat.
But for those forward thinking former students who have the financial means to purchase a home that they plan to stay in until their retirement years, it can serve as a major investment and a boon to their bottom line in the long run.
If you’re one of these recent grads, what you should know that if you end up owning your home for decades and are able to pay the monthly mortgage religiously, you can eventually apply for a reverse mortgage loan once your turn 62.
This can reap hundreds of thousands of dollars if not millions in some cases. You can take the proceeds in one large lump sum, or you can receive it in equal monthly disbursements.
You might want to check out some reverse mortgage reviews (https://reversemortgagereviews.org/) now just to get an idea of how the process works and which loans will be work the best for you when the time comes.
But is purchasing a home right out of college actually a good idea in the first place?
According to a new report, most people who buy homes wait until their 30s or even 40s. Why? Because they need to wait for a time when they consider their personal finances to be in decent shape. That can take years and years.
Also, if you’re going to buy a new home, you need to have the proper funds for a down payment. But if you were a scholarship recipient or come from a family who were able to pay for your education and, on top of this, you worked a job while going to school, then it’s possible you saved up enough money to put a down payment on a home. If that’s the case, you won’t be “throwing your money away on rent.”
That said, is purchasing a home right after a you graduate a good idea? Or is a better idea to wait a while?
The Benefits of Purchasing a Home Right After College
The experts say that there are “universal benefits” to purchasing a home. These include stability, tax breaks, along with the owning an asset that gains in value over the years. It only makes sense that the sooner you purchase property, the sooner you can reap the financial benefits, which means buying a home immediately upon graduation can be a good idea.
From a lifestyle point of view there are advantages to settling down and “planting roots” in an area of the country where you feel most at home. When renting, there will always be the chance that your lease will not be renewed. Therefore, you’ll have to find a place to relocate which could end up being in a neighborhood or city that’s not your ideal location.
The Downside to Purchasing a Home Right After College
Financial experts agree that there are specific considerations to contemplate if you’re thinking of buying a home right after graduation. The first of these is that you will be brand new to the workforce. You never know what path your career might take.
It’s entirely possible you take a job right out of school only to find out you can’t stand the field you have chosen. But what do you do if you own a home and yet you find a job you want to take that’s located 500 or 1,000 miles away? You might have to decline a lucrative offer in a field you love just because you’re stuck with a home that hasn’t yet begun to appreciate in value.
One more thing to take into account is that being new to the workforce means you do not have an established credit history. Your credit score might not be so high. This means, the lower your credit score, the higher your interest rate is going to be on your mortgage. In that case, it could be beneficial to “wait until your credit history is more established” prior to applying for a home mortgage.
Lastly, being a homeowner comes with a heck of a lot of responsibility. While your young friends might be jaunting off to Europe or heading out on the town most nights, you have bills that need paying and home maintenance to take care of.
Being a homeowner means growing up far sooner than later.