The impact on First Time Home buying and College Debt ?
Increasingly we see that college graduates are delaying their entry into the housing market and seeking that first home. For many people years of renting will occur while accumulated college debt gets paid down or off.
Studies report that once your debt related to college exceeds $25,000 you are much less likely to consider purchasing a home as opposed to someone who has little to no college debt. This dilemma applies to Millennials, many of whom are burdened with with excessive debt levels. Of course coming out of college we expect a return on the investment related to obtaining a college degree. Earning potential, conceptually should permit the offset of any financial impositions related to obtaining a college degree. While this is generally true, the millennial generation still seems to be getting older as they enter the housing market.
There is a bit of a juggling act.
Do you save for a home down payment or pay back college loans first? If you’ve already saved up, do you use that money for a house or to pay off student loans? What are the qualifying guidelines for buying a home? If you're not aware of these how can you prepare for home ownership? What is the minimum required credit score in order to qualify for a home? How much cash does it take to make that 1st purchase and are there special first time home buyer programs to assist? (BTW… Yes there are!)
You may want to seek guidance
Guidance could come in the form of a financial planner, tax accountant, and a whole host of other parties including a real estate professional. We still contend that investing in a home is generally a sound investment and a tool for building additional net wealth over time. Early in the game there should be a clear understanding of the rent versus owning concept. It is very simple but often time totally misunderstood.
Our advise, make the call and explore home buying regardless of your college debt. It does not cost anything to become informed. In the short term, maybe it is not the right time. But if it appears so, there can be financial and personal benefits. Call the Pinnacle Real Estate Co. today at 410-560-3556 for a no obligation meeting to explore answers to these First Time Home Buying and other questions.