General Question

Brenna_o's avatar

I need house buying tips for a new college freshmen couple?

Asked by Brenna_o (1776points) December 12th, 2010

Currently I am a senior in high school but I plan to go to college away from home and live with my soon to be fiance. My college is an hour away from home so I would like to find a small place close to school. Any ideas for loans, or any tips on any house buying related issues?

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25 Answers

klutzaroo's avatar

Why buy when you can rent? It makes much more sense. You never know where life will take you, if that’s the right college, if you can afford it really, or any of a million other things. I’d suggest renting for at least a year before your try to buy.

YARNLADY's avatar

It is becoming very common for young college students to purchase condo’s near their school. The main thing you want to watch for are the expenses outside of the actual payments.

If you have a good down payment, you can avoid PMI, but keep in mind that utilities, taxes, and other local assessments can really add up. Don’t let a real estate sales person try to convince you to buy a house/condo where the payments eat up your entire housing budget, because there are too many other expenses outside of the Principle, Interest, Taxes and Insurance (PITI).

klutzaroo's avatar

My main thing is that there are tons, literally tons, of people who go to a college and then decide that they’d be happier somewhere else. A smaller school, a bigger school, one with a better program in this or the other thing… This is something that you need to think about before making a major commitment like purchasing anything. A lease is comparably easy to get out of if you need to, but purchasing a house, condo, or anything else is a really big deal and you need to be absolutely sure that this is a place that you want to be for quite some time. You can’t possibly know until you get there and experience it.

Hypocrisy_Central's avatar

Dang! You must have a grip like a T-Rex and AAA+ credit. Unless you are Mark Zuckerberg I think in this economy you’d have a hard time getting any lender to not be nervious giving you a mortgage. If you go through a private owner try to see if they will do a RTO, even if they say house for rent ask themn if they will entertain a RTO situation. Then the terms are between you and the home owner. No commision, and maybe no evasive credit checks.

Judi's avatar

How much down payment do you have, and what is your source of income? That, along with your credit rating are the three things you have to be able to answer with exceptional (for a college student) answers in order to qualify for a home loan.

BarnacleBill's avatar

You should not plan on buying a house where you are attending college because your duration in the college town may be short, and it could be difficult to sell. Owning a home requires a downpayment, in most cases, of at least 10% of the purchase price. When mortgage amounts are generally sited in ads, the cost quoted is PI (principal plust Interest). You need to know what the cost is PITI (principal, interest, taxes and insurance). As an example of the impact of this, my mortgage payment PI is $980. PITI it’s $1648. If you factor in what I spend on maintenance issues, landscaping, etc. I’m spending about another $300 a month on the house. Even if your boyfriend is handy, the supplies to do things cost money. The furnace guy just came to house – $300. Plumber to fix the dishwasher—$99 service call, $36 an hour (which is cheap).

If you have enough of a down payment to buy a house, the only way it might work is to plan on renting out rooms to other students.

snowberry's avatar

This is interesting. When my daughters enrolled at Ball State in Indiana 4 years ago, they had to either live at home (with Mom and Dad), and it had to be within 60 minutes’ drive of the campus, or they had to be married. Your question sounds like you intend a live-in situation. At Ball State, if you could not fulfill those requirements, freshmen and sophomores had to live on campus. Maybe you could get away with it if the place the kid lived in was owned or rented by Mom and Dad, and Mom and Dad lived in another place, but I don’t know. That certainly was not the intent of the rule.

answerjill's avatar

I think that you might be better off renting. As others have said, there is a good chance that you will want to move somewhere else after graduation. Plus, homes require maintenance and other things that you might not want to deal with while you are also full-time students. I suppose that one benefit of buying is that once you leave town, you can rent it out to future students and earn some extra income that way.

Jaxk's avatar

Buying a house is a long term investment. College is short term (typically 4 years). By the time you add in closing costs and real estate brokers fees to sell it (typically 7%), 4 years is not enough time to recover those costs. Even if you assume their will be no more down side. If the government eliminates the home interest deduction expect housing prices to plummet again.

Basically this doesn’t sound like a good idea. I would think renting is a better way to go for the near term.

MyNewtBoobs's avatar

@snowberry Those are state laws, not federal. In my state,the exceptions were over 21, living with family, or married/had kids. You only had to live on-campus the first year.

wundayatta's avatar

A lot of students are buying houses these days. Or, more to the point, their parents are buying houses for them. Even if you lose money when you sell, it probably would not be as much as you would have paid for dorms or to rent. Most likely, you’ll be able to sell the house at a profit when you graduate. It’s a smart thing to do, I think.

Most people think of homes as a long term thing, but there are more and more people who think of them as a short term thing. A lot of people used to “flip” houses (own them for only a day or week or month before reselling them) before the mortgage loan crisis. I’m sure it’ll come back when the market gets going again.

Anyway, set your criteria for a house (how many rooms, what size, on a side street or a main street, how close to public transit, how close to highway, in what kind of neighborhood). Talk to an agent, and let the agent show you houses. But also drive around in your neighborhood(s) of interest on your own, to see what is out there. You might want to get a “buyer’s” agent. An agent represents the seller unless you hire one to represent you.

Oh there’s more. Make sure you get an inspection. Make sure you can pay the mortgage. Make sure you have adequate credit. There are books about home buying. Read one or two.

answerjill's avatar

@papayalily @snowberry
I have never heard of states having rules like that. I imagine that it was the college’s policy. When I was in college, the university said that we had to live on campus for the first two years (with a commuting exception).

MyNewtBoobs's avatar

@answerjill Public colleges do. Private can do whatever the hell they want. It might be a newer thing since you were in college (having no idea when that was…)

mrrich724's avatar

In todays economy, it’s way more difficult to get a home loan. Unless your parents are cosigning, or you have a huge deposit, I’d recommend your first step being to apply with a bank in that area and see how much you qualify for, and what your monthly payments need to be to afford it. Once you know what ballpark you are playing in, you can look from there based on home value.

I would HIGHLY recommend going through a year of college first. So many things change when you go off to college, including your values. You might think this is what you want now, but a few months or a year from now you may want to rent, or you may get to know the college town better and decide you like another location better…

Good luck.

BarnacleBill's avatar

My daughter was away at public college the first year, and she had to live on campus as well. They told us that studies show that students who live on campus their first two years are more likely to graduate. I could see that increasing the odds.

klutzaroo's avatar

Each university has their own policy on freshman living arrangements and dorm requirements. In general, they resemble each other (within a certain distance, living with parents, married, children). Its only in the specifics that they differ.

Brenna_o's avatar

I dont currently have credit because I am only 17. But my boyfriend is currently in a CNA program so he can get a good job week after christmas when his class is over. And I tutor at a grade school. So we wont have a huge down payment, but a small one. Maybe a few thousand.

Brenna_o's avatar

Oh and I plan to go to the evergreen state college and as a freshman you are not required to live on campus.

klutzaroo's avatar

@Brenna_o Regardless, its still not a great idea. Rent for a year, find out where you want to be and what you really want to do. Build your credit. After that, buy away.

YARNLADY's avatar

@Brenna_o I’m sorry to break this to you, but a few thousand is not enough money for a down payment on a condo, much less a house. Closing costs alone usually amount to several thousand dollars. It would barely be enough to get you into a rental, since most require first and last month rent plus a security deposit.

No lender in their right mind would sell to a minor and a college student with no employment or credit history.

BarnacleBill's avatar

You need at least $5000 to $10000 in the bank to successfully move out of your parent’s house and stay moved out. Moving into a house, you can easily spend $5000 on furniture, appliances, etc. even if you are renting. Not everyone has relatives that will give them these things, and not all parents will let you take your furniture with you.

One of the reasons colleges want freshman to live on campus is to spare parents from having to set up housekeeping for a freshman. I spent almost $700 on kitchen stuff – dishes, pots and pans, silverware, utensils, toaster, coffee maker, baking pans, mixer, etc. as well as the things you take for granted, like spices, cooking oil, condiments, etc., for each of my daughters.

I see on Evergreen’s site that in-state costs are estimated at $18,756, with $8,400 a month being living expenses, which sounds reasonable. My daughter is living on her own, with her boyfriend, and her half of their living expenses is about $1,000 a month. This is rent, heat, water, electric, food. They don’t really eat out, don’t have the internet or cable. She was lucky and had all of her furniture we bought her when she first moved out. She did have to buy a washer and dryer, but bought used.

How are you planning on paying tuition? Most parents will not pay tuition if their children are married because they are losing the tax advantage of having them as a dependent.

Brenna_o's avatar

I can get near 8000 a year of FAFSA and i work and so will he.
I don want to be married and living with parents…

Judi's avatar

Did you say a CNA program as in “certified nurses aide?” unless things have changed a whole lot since I did that, that job barely pays enough to survive renting a studio apartment.
The FAFSA money is for your education expenses, not for a down payment on a house.

MyNewtBoobs's avatar

@Brenna_o 8K a year? That’s good for, like, 8 months max if you get an apartment that costs 300 a month and never have anything happen like needing a haircut or needing to replace something that broke or needing to buy presents…

klutzaroo's avatar

@Brenna_o Your plans are completely unrealistic. Get a job, get some credit. Find a way other than student loans (which are for you being a STUDENT, not for use anywhere else, and its not “of FAFSA.” You need to look at where your money’s coming from if you’re planning on getting any). You can, because a lot of people do and have done it successfully, have a part time job and go to school at the same time. That, plus your boyfriend’s job might be enough to handle rent and living expenses. A “good job” as a CNA amounts to not much at all. He’ll need more school for an actual good job. You cannot afford a house at this time. You are not qualified to buy a house at this time. No one will possibly help you in finding a house at this time with how unqualified and out of touch you are.

Once again. Find somewhere to rent, find a job, build your credit, figure out if that’s where you want to be and once you’ve done all these things, then start thinking about buying a house. You are WAY ahead of yourself here, and you have a long ways to catch up.

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