Should College Students Wait To Start A Mortgage?

College students are a major part of the change in societal norms and demographics that’s sweeping over the U.S. and around the world. Housing is no exception to this change.

Image via (Realtor.com)

“In 2016, millennials have the power to remake the real estate landscape wherever they choose to settle,” a Realtor.com report stated.

The looming questions for most college seniors after graduation seem like the hardest to tackle. You’re about to be thrown out to the wolves of the real world. This isn’t some ’90s teen movie, either. As kids, we may have dreamed of moving to New York or Los Angeles to start our adult lives. However, many metropolitan areas are losing their allure to more affordable cities that seem be thriving with their own culture.

And if you’re not one of the few that are still planning to move to NYC or LA, check out the infographic below for options you probably hadn’t thought of.

Image via (Realtor.com)

Homeownership Goals

I don’t know a single college student that doesn’t think about owning a home one day. When asked about when they’ll decide on starting a mortgage, though, many shake their heads and say, “I don’t know yet” or “I’m not sure.”

For most young people, words like mortgage, home loan, and homeownership aren’t in their everyday vernacular. We’re not 35 years old and talking about how the kids are doing great in karate and baseball. We are talking about applying to graduate school, taking a gap year and traveling, or getting hired for a full-time position at the company where we first started as interns.

Young adults think the best housing option after graduation is renting an apartment in or close to the city. Others are choosing to move back in with their parents while they save up and get on their feet. There are cheap mortgage rates that rival monthly rent rates in many areas, though. In fact, here are 10 big cities where it is cheaper to buy a home than to rent one.

Defining Stability

There is no one right definition of stability. These days, college students are just trying to make it through another semester. Many have plans for graduate school for the next two to five years, and others know that they’ll be taking on a full-time job. Some seniors have also looked into working abroad, while some have decided to move to a new city with their partner. Stability can consist of several factors and ideas that vary between individuals.

The infographic below is a report pulled together last year by Bank of America and USA TODAY that shows how millennials determine where they want to live based on certain desires.

Image via (Bank of America)

Not much has changed since the fall of last year. Young adults prioritize family and job opportunities as stability factors. What most fail to understand is that sometimes the best opportunities are found far from home. It may feel frightening to take a huge leap of faith, but trying is half of the success.

Taking the First Step

No generation knows how to utilize the internet better than millennials. There are many resources provided by the U.S. Department of Housing and Urban Development and websites that let you calculate affordable mortgage rates depending on your current or expected income; there are even home improvement loan programs if you decide to buy a used home that needs a bit of fixing.

Online calculators save lives — especially the lives of all the college students that struggle in math. Use Nerdwallet’s Mortgage Calculator to calculate what mortgage rate you can afford on your monthly income. Learning how much you’re making and how much you need to make to live comfortably will help you decide on the next step.

If you’re comfortable where you’re at and feel good about buying a house, just do it. There’s no better time than now. If you’re not where you want to be, start researching better areas in the nation that are highly interested in your field of work. Compare mortgage rates to possible incomes, and change variables such as cities and income rates. Lose the feeling of being stuck or desperate to choose one permanent home by weighing different options.

Loads – And Loans – To Think About

There are also loan options and income-based repayment tools that college students should take advantage of to finally make your dream of owning a home a reality.

Image via (Investopedia)

House hunting also means house loan hunting. Banks will provide housing loans to students and may offer flexible rates, but options are limited to their own. Brokers and accounting professionals will offer better advice than banks.

It doesn’t matter what you decide as long as you make a decision. There are better and more affordable options for young adults to choose from, assistance after college, and a great-looking forecast for millennials.