Getting a Mortgage as a Student
August 18, 2021 | Posted by: Brad Vokins - Port Perry - Durham Region Mortgage Broker
Purchasing a home is most likely one of the most sizable purchases most of us will ever make, and finally, buying a home is a dream come true for most.
For students, it may seem like this dream is forever out of reach. Especially with the added burden of paying for college and student loan debt, you may think you will never be a homeowner. But, it is possible to qualify and afford a mortgage even as a student.
Buying a Home as a Student
Buying a home as a college student is not the easiest thing to achieve, but it is not out of the question, either.
Before you start looking for real estate and applying for mortgages, ask yourself if owning your own home is the ideal investment for you right now. Homeownership is an expensive proposition, and if you are already struggling to make ends meet financially, it may not be the ideal choice for you at this time. But, if you are financially stable as a student and are ready to start building your equity, real estate is the perfect option.
Qualifying for a Mortgage
For everyone, including college students, purchasing real estate begins at the same place: qualifying for a mortgage. You have to be at least 18 to be eligible for a mortgage, and most lenders look at:
· Type of home
· Down payment (20% of purchase price)
· Employment status - most lenders want to see full-time employment
· Length of loan
Recently, most lenders have tightened their criteria for lending mortgages. If you can meet all their requirements for a mortgage, you will have no problem qualifying for one as a college student.
Affording a Home as a Student
Fortunately, there are assistive programs out there that make buying a home easier. For example, Canadians have programs such as the First-Time Home Buyer's Tax Credit, the GST/HST New Housing Rebate, and the Home Buyers' Plan. In the United States, there are programs like the U.S. Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA) loans, and U.S. Department of Agriculture (USDA) loans to make buying a house more affordable.
These programs are perfect for students that have low income or small down payment sizes. As a college student, take advantage of these programs and loans to make purchasing real estate as affordable as possible for you.
Challenges Of Buying A Home As A Student
Lack of income, small down payment size, and no credit history are usually the primary challenges you will face when buying a home as a student. Fortunately, there are loans available for first-time home buyers and those with low income and small down payment sizes.
If you are repaying student loans, they may have a positive effect on your mortgage decision. If you do not have any student loans, think about building your credit score and credit history. One of the best ways to grow credit is with a secured credit card. Another great way to improve your credit score or credit history is by asking a family member or friend to add you as an authorized user on one or more of their credit accounts. These are terrific strategies for quickly building a credit history with no previous or poor credit score.
Find Your Dream Home Today
Don't let being a student hold you back from buying a home. If you are sick of paying rent and want to start investing in your future, make your dream a reality and find a home that is right for you. As a student, you may face additional challenges when trying to qualify for a mortgage. But, with the optimal numbers and assistance, it is more than possible to secure your loan.
Don't wait and start the journey to find your dream home today.