My fellow Realtors are going to be a bit peeved at me when they read this article. Why? It’s college graduation time and I’m going to tell you lucky graduates NOT to run out and buy a home for a few years. I know that seems like crazy advice right now especially since mortgage interest rates are incredibly low and mortgage payments are less than rent payments these days. Please consider some of these points when you approach the biggest financial decision of your new life:
1) What did it just cost you to get that diploma in your hands? Just two years ago the Huffington Post reported that the average college student owed @$25,000 in loans once they graduated. President Obama has been lobbying Congress and speaking at universities around the U.S. in the past two weeks explaining that many student loan payments may double starting July 1, 2012 if changes aren’t made immediately to Federal loan programs. If you’re one of those unlucky kids who’s getting the crap scared out of you because you might not be able to pay back your student loans, then it’s not a good time to buy a home. Your debt is too high and may be getting higher!
2) The Associated Press just released a survey this past week that said basically 50% of college graduates this year won’t be able to find jobs or find positions in their field. Generally when you apply for a mortgage loan, you have to be on the job for at least 2 years. If you just got lucky and were offered a guaranteed job in your new field (i.e.- a position with a local law firm for $45,000 a year as starting pay), a lender will have some hoops for you to jump through before you get a home loan. Basically, you have a 50-50 chance you might not have a job waiting for you after your parents go home after the graduation ceremony. Certainly it’s not a good time to buy a home without a job. It’s an even worse time to buy a home if you landed a job you know you’re not going to stick with for long, or if you think you’ll be moving out of state later for better employment.
Congratulations on getting that sheep’s skin. Right about now you’re pretty much done with people telling you what to do, how to do it, and where and when to get it done. I humbly ask that you consider a few last words of wisdom…if you can stand it. Make sure you go over all your options when you decide to buy a home. Giving your landlord the middle finger is a wonderful feeling, and owning a home can be an even better one. Please WAIT until all your financial and career ducks are in a row.
And last but not least, use a professional. These days it’s easy to shop for homes on the web. You can download forms and all the books you can possibly read about real estate onto your IPad. Aligning yourself with a full time negotiator (Realtor) will make the same difference in your financial plan as when you stopped having your roommate take notes in class and actually attended in person.