Approximately 45 million people across the country carry student loan debt and it’s pushing their dreams of home ownership further and further away. Over 80 percent of college graduates have at least $30,000 in student loan debt and over a fifth of students owe over $100,000. Many people aren’t getting homes until they’re in their late 30’s because they believe their debt won’t allow them to buy a home. According to a recently released CNBC article, people between the ages of 22 – 35 said the main reasons they can’t achieve the dream of home ownership are:
- Lack of funds for a down payment
- Not feeling financially secure
- Low credit score
- Too much debt
- Uncertainty about the mortgage process
Buying your first home is an important milestone in your life and we want you to feel prepared for this step and informed about the mortgage process.
In this article, we’ll discuss our Down Payment Assistance options, your first steps in the mortgage process, why it may not be a good idea to wait, renting vs. buying, and all of On Q’s resources to help you better understand the mortgage process.
I don’t think I have enough money for a down payment?
We’re sure you’ve heard the myth that you need to put down at least 20% of the home’s value when you’re ready to buy a home, but at On Q we offer a variety of Down Payment Assistance (DPA) programs for qualified home buyers. Some programs ONLY require 3% down on a home! Our Mortgage Consultants can walk you through all of your options based on your credit score, income, debt, and other qualifying factors.
Where do I start?
Sure, you’re thinking how nice this all sounds in theory, but where do you even start? The first step is prequalification. This is where you’ll tell your Mortgage Consultant your credit score, income, debt, and other qualifying factors and they will give you an estimate of the loan amount you could qualify for. They DO NOT run your information; they just give you a loan estimate based on what you tell them. This step helps give you a budget based on the amount you prequalify for. On Q’s Mortgage Consultants can help you through this process and give you an idea of the first steps to getting your dream home.
What if I wait a few years and pay off more of my debt?
Yes, you can wait a few years, but the cost of waiting to buy a home could make your monthly mortgage payments more expensive. Right now the economy is doing well and mortgage rates are on the rise. For example, mortgage rates are around 4.5%, but if they continue to increase that could cost you hundreds more on your mortgage payment a month. Waiting can cost you more and push back your dreams of home ownership even further. We want to help you achieve this dream and show you that it’s possible and manageable.
Why not just rent?
I’m sure you’re thinking how much easier it is to rent your one or two bedroom apartment with a roommate, but the amount you’re paying for rent is probably close to your potential mortgage. According to the latest American Housing Survey by the U.S. Census Bureau, the national average monthly mortgage payment for home owners was $1,030 for a 30-year fixed rate loan. RentCafe released an article stating the national average for rent was around $1,300!
We know there are benefits to renting like having someone fix all of your things for free, less responsibility, and maybe a free pool, but the independence and pride that comes with owning a home can be so much more rewarding.
Where can I get information about the mortgage process?
Ok, so we’ve got you interested in leaving your parent’s house, studio apartment, or best friend’s couch, but you don’t know anything about mortgages beyond this blog. We offer a variety of tools and educational blogs to help every home buyer feel confident and empowered about the mortgage process. Below is a list of tools we offer potential home buyers:
- Mortgage Calculator
- Educational Blogs
- Information on Different Types of Home Loans
- Frequently Asked Questions
The mortgage calculator allows you to plug in the price of your desired home, down payment amount and percentage, interest rate, property tax, and annual insurance to get the estimated monthly payment you could have for your home loan. This is a great tool for those who aren’t sure what you can afford based on student loan debt. For a full breakdown of how your home loan payment is calculated and all the terms discussed above, visit us here.
Our On Q website offers “Mortgage News”, a blog section dedicated to keeping you informed on the industry’s important information. It includes information about everything from preparing for a home appraisal to do’s and don’ts of the mortgage process. Visit us here for all the latest mortgage and housing news and tips.
On Q’s Simplicity mobile app makes it easy to navigate the mortgage process. Simplicity offers:
- Text messages and push notifications for important milestones
- A mortgage calculator
- Payment estimates
- Secure document scans
- Fast communication with your Mortgage Consultant
Every student is thinking about the future when they go to college and get a degree, but now dreaming of the future is delaying your dreams of home ownership. Owning a home isn’t impossible. We want to make the dream of home ownership a reality – for everyone. That includes college graduates with student loan debt. On Q’s Mortgage Consultants can help you get there. For more information about how you can make your dreams of home ownership a reality, visit us at www.onqfinancial.com.