You did it! You graduated from college and maybe you’re now thinking of buying a home instead of renting. Whether you are in your first job, still looking or have money saved, here are some tips to keep in mind when thinking about the steps you need to take towards buying a home.

Save your job offer letter and college transcript.

Lenders typically want to see a two-year work history when reviewing a loan application. If your current job is a direct correlation to your major in college, then your college transcripts may be accepted in lieu of work history. Depending on the loan type, your college transcript, the offer letter from your employer and a paystub showing at least 30 days of employment may allow you to purchase your first home sooner than you may have thought.

A good rental history goes a long way.

A good rental history can benefit you in more ways than you may realize. First, timely and good record of payments can assure an underwriter of your ability to repay debt over a period of time. It can also help you avoid payment shock since you are familiar with allocating a certain percentage of your income to your housing expenses. Payment shock is when your total monthly bills significantly increase, placing you at higher risk of defaulting on a loan. Lastly, for those with very little established lines of credit, rent and utilities may be added to your credit report to help establish or boost your credit score. These types of credit are considered alternative lines of credit since they are not normally reported to the national credit bureaus.

Save your pennies.

While there are several loan programs that require as little as 0% to 5% down, you will need additional funds in your bank account to get settled into your new home. Many first-time homebuyers underestimate the amount of funds needed when transitioning to a new home. Moving expenses, home furnishings and appliances, deposits for utilities and other costs associated with a new home can add up quickly. While anticipating your next move, be sure to save your pennies so you have the funds to stock your new home.

To see how much home you may be able to purchase, contact your local mortgage banker for a fast and free prequalification.
 

By: Marlene Sheard

Marlene is a mortgage marketing representative for Ameris Bank and previous sales and marketing president for her local Home Builders Association. She enjoys sharing her experiences for the buying, selling, and financing of homes.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

*All loans subject to credit approval.