When moving away to college, buying your own home rather than renting can help you build equity and credit during a crucial time in your life. The idea of making such a huge investment may seem scary, but with enough care and guidance from the right people, you can navigate the buying process without any snags. To help you on your way, here are some important tips for buying your first home:
Check Your Credit
Chances are unless you owned a credit card or have some bills in your name, you will not have much credit to speak of when entering school. You should still get an idea of what you have to work with, though.
Ordering a credit report from one of the three major agencies will give you a chance to see how other businesses will see you. Do not fret if your score is low, either. You can take steps to raise it rather quickly, including:
- Assuming a utility bill in your name like electricity, gas or water.
- Opening up a line of credit with your local bank or credit union. Use it only to make a small amount of purchases per month and pay off all or most of the entire balance on a monthly basis.
- Pay off or close out past due balances. You can dispute inaccurate delinquencies, as well.
Get Pre-Approved for a Mortgage
Finding a home can be considered the “fun” part, but paying for it… not so much. Go ahead and get the financial aspect out of the way by consulting a mortgage lender. Shop around for the lowest advertised rates, then get a more specific quote by filling out a tentative application. You can then get “pre-approved” to see what terms a lender can offer you, including the total loan amount, interest rate, monthly payment and any terms you must abide by.
Keeping this pre-approval letter in mind while home shopping gives you an idea of your overall budget and what costs to expect from certain homes. You can even show the letter to a home seller before making an offer to emphasize that you will be able to secure financing.
Hire an Experienced Real Estate Agent
An agent can scout the market for you and reach important contacts to find you the house you need at a price you will love. Without an agent, you could fall victim to your own inexperience. You will also be at a disadvantage when it comes to negotiating offers or contingency contracts. Enlist the help of someone who can work on your behalf to give you expert advice and pull strings to find you the best property possible.
We will cover more first-time home buyer advice in part II of this post. To get an idea of what the Canadian university real estate market is like in your school’s area, take a look at our university area listings.