As a student, you likely already have a lot on your plate. From regular assignments to potentially messy roommates to stressful exam periods, it all adds up and creates a somewhat challenging learning experience.
And yet, some students still choose to take on even more responsibilities like having a part-time job, starting a family, or even buying a house. If you decided to get your own place to live, you will likely need to get a mortgage. But can you do that while still in college?
What is a mortgage and why do you need it?
A mortgage is a loan you can get to purchase or maintain some type of real estate (e.g. home, land). Mortgage payments are usually made throughout a particular period on a regular basis. There are different types of mortgages you can apply for, but they all have their own requirements and you will always have to go through a rigorous underwriting process before you get the loan.
Can students get a mortgage?
The short answer is yes. The long answer? It’s complicated. The biggest problem with getting a mortgage as a student is that it is a complicated process and that it can be very stressful for you, especially if you are fairly young and don’t have a stable financial support system. Moreover, depending on your marital status, getting a mortgage could only make it more difficult for you rather than making life easier.
Ariana Bosworth, an expert from the thesis writing service reviews, explains, “Not many students think about getting a mortgage simply because they are already burned by the fact that they have student loans to deal with. On the other hand, some students I’ve talked to are quite enthusiastic about the possibility of getting their own home. For them, the pros of getting a home outweigh the cons (that is, the fact that they need to get a mortgage for it).”
What do you need to get a mortgage?
As mentioned above, getting a mortgage as a student can be a complicated and stressful process. That’s why there is a pretty detailed list of the things you will need to consider when you decide to get a mortgage:
- To get a mortgage, you will need to have a high enough monthly income that will support your current expenses as well as your mortgage payments.
- You will also need to have a solid credit score of at least the high 600s. The higher, the better.
- Moreover, you will also need to have a relatively low debt-to-income ratio, around 36% or below that.
- For a conventional mortgage, you will also need to make a down payment of 20%. Alternatively, you can make a 3.5% for an FHA loan (for those who qualify for one).
If you do meet these requirements, you will likely have way fewer problems getting a mortgage as a student. However, if you don’t meet them, it will be very difficult (or maybe even impossible) to get a mortgage in your situation. Before you decide to apply for getting one, you need to consider all of these points carefully and analyze your current financial situation in a rational and objective way.
What are other options available to you?
Alright, but what if you decide not to get a mortgage? Are there any alternatives? The most obvious option is to wait and save money to buy your own house or apartment at some point in life. This is probably the best option for those who have a salary that allows them to save money while having a sustainable lifestyle.
Another option is to live with someone who already has their own house or apartment. For instance, you might already have a spouse who has their own place to live in. In this case, you likely won’t have to worry about getting your own accommodation. Of course, this option is mostly appropriate for couples.
One more thing you can consider is the rent-to-own plan. This is when the seller of a home lets you pay on a monthly basis as if you were paying rent. Likewise, you could be paying actual rent with a percentage from it going to the payment for the house itself. In a way, the rent-to-own plan is similar to a mortgage (but not quite).
Whatever option you choose, you still need to understand the stress that comes with it. You might need to get a job (or an extra job) or you might need to get some help with your studies. If you need help writing assignments, you can always choose a writer from one of the academic writing services reviews who will create the piece for you.
Pros and cons of getting a mortgage
Last but not least, it’s crucial that you consider the pros and cons of getting a mortgage before you make your final choice. Here’s what you should keep in mind:
- If you already have student loans, they could be either an advantage or a disadvantage for getting a mortgage. If the payments are relatively small, you will likely be able to manage both them and the mortgage payments. But if these payments are already taking away a significant portion of your monthly income, you might not be able to manage your mortgage payments.
- Depending on the region where you want to get a home, you might not be able to afford a home with your current income level. In other words, you might not be able to get a home in a particular location which is why you could end up living somewhere you don’t really like.
- Managing mortgage payments could be both mentally and financially stressful. In addition to that, it could potentially take you several decades to fully repay your mortgage. Likewise, you might feel too emotionally stressed out by the financial burden you now have, so it’s definitely worth considering your mental state too.
At the end of the day, whether you do or don’t get a mortgage comes down to your own priorities. There are many things to consider before you decide to get one, so treat this decision seriously. Use the information in this article to help you choose whether or not you want to get a mortgage.