Everybody needs a home, whether a student or adult. However, when you arrive at the college dorm, it can be pretty hard to call a place full of other people your home, and renting an apartment can feel pretty much like throwing money out the window. So, the only seemingly obvious solution is to purchase a house.
But most college students are just starting their adult lives, living on a very tight budget and devoting 100% of their time to learning, not everyone is ready to combine school and work. With that in mind, unless you get a house as a gift from, let’s say, wealthy parents, the possibility of buying it while still being a student sounds rather impossible.
As they say, nothing is impossible, including buying your own property while at college. But how can one make this real? And do you even need it?
In this article, we are going to tell you about the pros and cons of this decision and will point out the ways of making this venture work. Let’s dive in!
Why It’s Good to Invest in Property?
Obviously, there are plenty of benefits of owning property that go far beyond just acquiring a home.
First of all, it can be much more cost-effective. Living in a dorm or especially renting an apartment can get pretty expensive, and the worst part of it is that you are just giving away this money, gaining only a place to stay for a limited period. From this point of view, purchasing your own property is wiser as you pay for a place that you can stay at for years ahead.
Also, it can help you with your academics. We bet that each of you is familiar with this feeling when you can’t get ready for an important test or get other assignments done because of all the noise around you, sharing a home with others can really kill your productivity.
Finally, it is just a good investment. There is no secret that properties around college areas are in high demand and can get rather expensive. That is, even if you don’t live there, you can rent it and get dividends.
Why It’s Not Good to Invest in Property?
Although it’s not hard to recognize the perks of purchasing property, it is also important to know that there are certain drawbacks too.
First of all, don’t forget that buying a house is always expensive, even for someone with a full-time job and a high income. It will be even more expensive for students who also have to pay for college and, most often, take part-time or freelance jobs that don’t guarantee a stable income.
Secondly, being a landlord becomes stressful and truly hard work, not to mention a huge list of additional responsibilities and expenses. So, if your current focus is on studying, it might not be exactly what you want to go through at this point in your life.
Lastly, though it can be cost-effective, it doesn’t always make sense to tie yourself down with property. According to stats, around 45% of grads come back to their hometowns. And the rest may relocate to other places. If this happens to you, then purchasing a house may turn out to be a huge waste of time, money, and nerves.
Buying a House While at College: What Options Are There?
In an ideal scenario, you would’ve just earned money and purchased a brand new home for cash. But let’s face it - this is very unlikely to happen now. So, the only option you have is to get a mortgage.
Getting a mortgage is a fairly easy and stress-free way to buy a property. The good news is that you can qualify for it even if you are still at college. However, to be considered, you will need to have
- a solid credit score;
- a steady income;
- a low debt-to-income ratio;
- savings for a down payment (typically, 20% of the total cost).
If you meet all these criteria, you can seal a pretty good deal and start living in your own house, making a monthly payment that won’t be much different from a standard monthly rent.
Pro tip: If you don’t qualify for a solid loan because you’re employed part-time or because your income is too low, you can boost your odds with a co-signer. It can be your significant other, a parent, or guardian with sufficient income and a good credit profile.
Finally, be sure to consider governmental programs and agencies like Housing and Urban Development (HUD) or the Federal Housing Administration (FHA). Such opportunities are there to make housing affordable for everyone. Applying for such programs will still mean taking out a loan. But, at least, you will have a lower down payment, a more feasible property price, and a lower interest rate.
The Bottom Line
After reading this article, you know for sure that it is possible to buy a house while at college. And you also understand all the pros and cons of this venture.
One last thing we’d like to tell you is that a home is probably the largest and most expensive purchase you’ll make, at least for now. Therefore, such decisions shouldn’t be taken lightly.
No matter how much you desire it, don’t let this first impulse blind you and stay cold-minded. Carefully consider all the risks and benefits to make the best decision!