September 9, 2016

Questions About Buying Your First Home

Buying Your First Home – Evaluate Your Finances

Hi, everyone. It’s Marietta with the “Consumer Action Handbook.” I’m here to answer some questions for you, consumer questions that may be able to help you in your daily life. We’ve got so many questions for people after our Google hangout, and we want to just keep answering questions that you may have.

With that said, let’s just jump right in. The first question comes to us from a young lady. She’s a recent college graduate, she’s in graduate school right now. She says that she is interested in buying a house, but she’s little concerned because she lives in a very expensive area. The DC Metro area, which is a very expensive area.

Also, she has student loan debt, and she’s in graduate school right now, which is going to increase the amount of student loan debt she has. She is really concerned about how to make this dream a reality. I can definitely relate to the situation, as a young professional living in the DC area.

I also can relate to how expensive it is here, and just that desire to be able to buy a home. I have friends back in the Midwest who bought lovely and fabulous homes. I don’t know when it’s going to be a possibility for me, but I try to keep this in mind, and I hope she will, too, that it’s a marathon, not a sprint.

Buying Your First Home – Is Now is a Good Time?

You don’t have to buy a house right away. We want to make certain that we not just buy a house, but are able to keep our house. That involves having some reserve funds for emergencies, for being able to make payments on other things, utilities, taxes for property, and just things like that.

Even though she’s not making a down payment today, there are things you can do every day to help get that goal become a reality. I just want to share a few of them with you.

Buying Your First Home – Save and Budget

The first one I would suggest is to save regularly. It’s so tempting to want to buy the new, fabulous pair of shoes, or take every vacation with your friends, but knowing that you need to take care of yourself, and your savings first as a priority is a crucial thing in this whole marathon of buying a house.

You should definitely have some money budgeted for fun things, and activities with friends, and family, but make certain that you’re making saving a priority in your financial portfolio. If you need help on knowing how to save, particularly for young adults, there’s some resources available on mycreditunion.gov for young adults that are specifically geared to what are
savings goals are, and things that we’re facing.

Another area, a place that you can go is publications.usa.gov. There’s tons ofpublications_usagov_logo saving and investing resources there that you can order or download. That’s one step, save regularly.

Another is pay your bills on time. You’d be amazed how important that is as you’re trying to apply for mortgages down the line. It helps you determine what sort of interest rates you can get, what sort of programs you’re eligible for, and showing that you’re a responsible creditor, that you pay your bills on time, that you can manage your debt is crucial when lenders are looking to determine if they’re going to give you a mortgage loan.

I would suggest that you pay regularly on your credit, and all your bills. The third thing I would suggest is, look into repayment plans for your student loans. She mentioned that she’s a federal employee, and the Office of Personnel Management offers a repayment plan for people that are federal employees so that their student loans can be reduced.

That is a significant load off your mind, if you know that you don’t have to pay everything back out of your pocket for student loans and there’s some help available. Maybe you’re not a federal employee. There’s still other programs available if you’re a public servant, police and teachers.

They sometimes have within their cities, states or jurisdictions, similar programs for repayment of loans. Some companies actually do student loan repayment programs. Take heart on that, and that may be a possibility, too. I would just say just keep the faith, stay encouraged, keep working hard, finish graduate school.

Don’t really worry about it in the day‑to‑day, but do all these things together to help you be on the path so that you’re able to buy a house, and enjoy it, and not worry.

Thanks for your question. If you have questions, we’d love to hear from you. We’re still taking them, and answering questions, as you can see. You can write us, you can email us, or you can tweet us using the hashtag #AskMarietta. Thanks.