You’ve graduated college (congratulations!) and are now wanting to take the next step in life with a mortgage. What does that timeline look like?
Once you’ve graduated college with a degree, you can get a mortgage as soon as 30 days from the start of your new job. We’ll cover the rest of the details in this article, but yes—30 days after your employment starts.
Let’s take Jane, for example. She is about to graduate with a degree in nursing next month. She will be making $50,000/year and has a job lined up.
Jane can start looking to buy a home now! We can use $50,000 per year as her qualifying income. Once she graduates, she will supply the lender with a diploma and 30 days of paystubs, satisfying the proof of income required for the application.
The usual rule of thumb is to have a 2-year employment history. So, in this case, her education with the diploma becomes a 2-year history.
Caveats to consider—
Co-Signer:
If 50k per year won’t get you the home you’d like because of student debt or other obligations, then you can ask your parents to co-sign on the application to add more income when you apply.
No Score:
A quick way to get a credit score is to ask a parent to add you as an “authorized user.” While your parent may be a bit concerned, the credit card is mailed to the account holder’s address, and the reporting history shows up on your credit bureau. This is only a place to start.
Another way to get a score is to apply for a secured credit card. Discover and Capital One both have secured credit card programs. With a secured credit card, the applicant sends in a deposit as additional security to get the credit card. Keep a low balance-to-credit limit ratio, and this will help you obtain a credit score.
Down Payment:
There are programs that will help you buy a home with $0 or $500 out of pocket, based on your income and where you live. Well-qualified loan advisors will know these programs.
In Conclusion:
Homeownership is the best investment a person can make in their future, next to a good education. No sense in putting it off!