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Real Estate 101: Owning home within grasp of students
Mortgage is an intimidating word, especially for students; but buying a house while still in school may be a practical idea that merits consideration.
The 2005 National Association of Realtors Profile of Home Owners and Sellers reported 50 percent of first-time home buyers were between the ages 25 and 34.
The NAR survey reported 40 percent of the houses bought in 2005 were first-time buyers.
Alice Prior, MCC alumni, mortgage consultant for Valley Mortgage Financial and a successful homebuyer, thinks that buying a home is a great long term investment for students.
“When you are renting you are giving someone else money to put in their bank, so why not buy your own home, get a couple of roommates and have your roommates put money in your bank,” Prior said.
“I had always wanted to (buy a home), but I have never been knowledgeable enough to do it, that’s why I was scared because I didn’t know about it. So, I got into the business and learned about it, and now I am very happy that I own my own home. If you are going to buy a house, it’s a risk, but I would definitely suggest doing it,” Prior added.
Financial stability and obtaining good credit is the first step towards owning a home. Three different trade lines are optimal. For example a credit card, car loan, and school loan. “Always pay your bills on time even if it’s the minimum amount, try to keep your accounts open for as long as you can, and don’t go over your balances,” Prior said.
A mortgage consultant helps the buyer secure a loan and works with the borrower through closing. “Definitely get to know your mortgage broker and be sure they are truthful with you,” Prior said.
Making the down payment is not the only cost to buying a home. There are credit report fees, application fees, processing fees, title insurance, home inspection fees and closing fees.
“You are going to have to pay your mortgage and other bills too. You’re going to have payment shock,” Prior said.
Eric Weeks, a broker at Peak Mortgage, emphasized, “The steps to buying a home are complicated. But they don’t have to be. If you make connections with the right people, you can rely on them. That is their job.”
The NAR survey reported 90 percent of homebuyers used a real estate agent when going through the home buying procedure.
Nancy Moffat, a real estate agent at Codwell Banker Residential Brokerage, said, “Don’t be afraid to use a Realtor, they are the person that will protect you through the process of buying your house.”
The NAR reported that the typical home buyer looked at least 9 different properties, it took them about 8 weeks to find a home and this property was on average 12 miles away from their previous residence.
“Location is very important when buying a home. Decide where you want to be and what is affordable in that area,” Moffat said.
She also advises that the best investment for a college student would be a condo near campus.
“You can’t go wrong, it will keep its value and the market will always be there,” Moffat said.
Sacha Levine, a young homeowner, said, “It was great having a Realtor I could trust, this was very important. It was an intimidating process. You have to learn all these new words and concepts. After being approved for my loan, I probably looked at 20 to 30 different properties.”
Levine is working full-time to pay for her mortgage. “In the long run it will pay off.”
“Honestly, kids need to get out there and get a couple roommates, especially during college, it’s the best time to live with a roommate. College is the best time to buy a house,” Prior said.
Home Buying Tips
Alice Prior of Valley Financial Mortgage suggests these steps to become a successful homeowner:
• Location; choose a place that is best for you.
• Don’t close credit cards; the longer your
account is open and paid on time helps.
• Distinguish between your wants and needs
• Be honest with your mortgage broker so they can best meet your needs.
• Analyze your budget and financial situation
• Be prepared for payment shock. Take other fees into account.
Volume 44, Issue 4. Today is
Alice Prior and Nick Quenzer review a loan application. Mortgage loans usually take six to eight weeks to close.
Photo by Ivy Villaflores