Ahh, it’s about that time. Time when students post nonstop status updates about finals. When coffee shops are full of college co-eds getting in just a few more hangouts. Time when job sites are jammed with entry-level openings for those leaving college and entering “the real world.” Yep, it’s graduation time.
As I see the napkins with graduation hats and plastic table decorations flashing “Class of 2012” line the aisles at Target these days, I can’t help but think about this graduating class and their future plans. Is buying a house the first thing on their minds right now? No, probably not. But one thing they probably don’t realize is what they choose to do now will impact their future in a big way… and even when it comes to home ownership.
A Mortgage Lender’s Advice to the College Graduate
The class of 2012 has a lot of promising days ahead. The Hiring Site posted an article about a survey of employers that said, “More than half (54 percent) plan to hire recent college graduates this year, an increase from 46 percent last year, 44 percent in 2010 and 43 percent in 2009.” The economy has been rough to college grads (ahem, and those in real estate) in the past couple of years, but finally in 2012 we’re starting to see a break. Employers are offering more money and on the hunt for new graduates once again this year.
Read the full article on Employers Planning to Hire 2012 Graduates
With so many newcomers entering the workforce in the next few months, I thought I’d throw my two cents of advice in there in case anyone’s looking for any more life advice right now. Here’s some of my advice for the college graduating class of 2012 as a mortgage lender that’s going to be getting many of these graduates into a new home sooner or later:
1. Get A Job – Yes, Seriously.
Of course you know you need a job, but I’ll be another voice for that cause alongside your parents. You need a job! And why? Not only so you can pay your bills and go to the movies (oh the college days.) But you also need a job to build up your credit score and employment record. Not too long from now you’re going to want to buy a house and your mortgage lender will want to see employment history and credit history: two things that require a job in order to look promising. So, keep looking and keep your head up. Even if the offer you have isn’t your “dream job,” if it’s all you’ve got, consider taking it for the sake of getting your employment going.
2. Don’t Go Crazy With Your Paychecks
A lot of graduates are about to make more money than they’ve made in their entire life with their first jobs. However, I recommend being wise with your earnings and not go crazy. Spend wisely, make sure you take advantage of any investment options your company has, and spend within your means. Also, as you start making more, don’t see that as a license to acquire more by going into debt. Debt can hurt you, and especially when it comes to buy a house.
3. Renting Might Not Always Be the Best Option
Although you’re new out of college, if you know the area where you’d like to live you might consider buying a house sooner or later. Renting is a great option if you’re saving for a down payment or getting your feet wet with a new job or in a new area. And while some relocate for positions, others return home or go to areas in which they know they want to live and settle down. If you’ve got a good job and good savings, it might be worth checking into home ownership sooner than later. There are a lot of great programs out there for first time home buyers.
4. FHA Loans Can Have Gifted Down Payments
Going with point #3, if you know which area you’d like to live in and are already interested in buying a house, remember that FHA loans can have a gifted down payment. That might be a good option for your parents who are trying to figure out what to get you for graduation!
5. You’re Young. Meet with a Financial Consultant Early.
Last, I encourage all graduates to meet with a mortgage lender and/or financial planner early in their careers – not just when it comes time to make a move. I personally love to sit down with clients and give them a game plan for how to afford a house. (This is much better than helping repair credit after the fact!) If you’re young and interested in how to own a home one day, call me and I’ll help you understand what to do now in order to save for that day. It’s not as hard as you might thing – at least not as hard as landing that first job!