A College Grad's Guide to Homebuying

After college will I be ready to buy a home? The time is soon coming when I will graduate and start working full-time. I have heard financial advice saying I should buy a home as soon as possible since homes are investments that will always appreciate in value, but am I ready for such a big step? In trying to decide whether or not I am ready to buy a home I researched the things a person needs to consider before buying a home. These questions were useful in making my own decision and can be implemented in your life when making the decision to buy a home or wait.

What is my credit score?

Something you definitely don't learn about in college is the importance of your credit score. Throughout college I received numerous credit card offers, but not once did I receive unsolicited advice about my credit score. This is a shame because my credit score plays a major deal in

If you have just graduated you probably won't have extensive credit, or a great credit score. This is a major thing to consider when thinking about buying a house because your credit score will affect the rate of your mortgage. Credit scores below 600 will receive high rates that cost you a ton of money in the long run. Once a year you can check you credit score for free at annualcreditreport.com.

Do I have a down payment?

The no money down plan for buying a house has been popular in recent years but that fad is fading as mortgage companies face an unsteady market. In the current market it is very important to have a down payment, preferably 20 % of the home's purchase price. You can use a smaller down payment but you will have to take out private mortgage insurance that can cost thousands. The need for a down payment makes it hard to consider buying a house right out of college because chances are you weren't saving much during those four years of school. If you have saved during school and have additional financial help from family members you may still consider buying a house your first year out of school.

Can I make the monthly payments?