Balancing Finances – How to Pay for a Home and Pay off Student Loans
One of the most difficult of challenges for students looking at buying a house after graduating is the requirement to begin paying for student loans. First, consider that wise financial management should allow you to do both. Work to not build up credit card debt or personal loans. You may want to avoid buying that new car. Instead, put your money towards paying down your student loan debt. However, recognize you have time to make those payments. If you find it difficult to do both – save for a home and pay your student loans, consider the advantages of refinance your student loans into a lower monthly payment. Most often, these costs are minimal, and they can help you make managing your budge a bit easier.
Create a Budget with Built-in Savings
Your personal world changes when you decide to buy a home. Your focus should be on finding ways to build up a down payment. To have a down payment, you need a budget. Creating a budget is one step in the process of building a solid financial future even if you are not buying a home. Here are a few key tips:
- Start with your income. Budget based on what you bring in, not what you are not earning.
- You can boost your income by working an extra job if needed, but do this only when you want to build savings. If your expenses are too high, work to find ways to lower those costs.
- Make your savings for purchasing a home a key component of your budget. It's not just for extra money. Rather, it should be something you are contributing to every single paycheck.
Consider All of Your Lending Options
While some lenders require a 20 percent down payment to buy a home, that's not always necessary. For example, FHA loans can help you with a significantly lower down payment. Talk to your lenders about the options available to you. You may be surprised by just how affordable it can be to get a low interest mortgage loan for a home.
Why You Should Make Your Move
Right out of college, you may be focused on your career, but you may also be thinking about your family and your future. Buying a house makes sound financial sense in most cases. It allows you to build wealth sooner and it allows you to build equity – which you may be able to borrow from at some point in the future through a low-cost loan. Most importantly, buying a home out of college allows you to create the lifestyle you want while you are young, learning, and growing. With some support from your lender, it's possible to make this happen.