Now that you’re working, you may be wondering whether you should get a mortgage to buy a home rather than rent a property. At the end of the day, the best option depends on your personal circumstances.
However, to make an informed decision, you need to consider the following things.
To buy a new home, you need to have a down payment and get preapproved for a mortgage. You then have to pay monthly amounts via either a fixed-rate mortgage or an adjustable-rate mortgage, so you need to know whether you can afford the loan. If you’re new to the workforce, you could be on a low tier of pay.
However, there are ways of finding mortgages with lower interest rates. The primary way of doing that is to simply shop around. Different lenders can offer different rates, which can add up to large differences in your average mortgage rate. So, if you do decide to get a mortgage, compare different lenders to make sure you get the best deal.
If you have just started your very first job, you could have difficulty getting a mortgage. The majority of mortgage lenders like potential homebuyers to have consistently worked in the same field for a minimum of two years before they can qualify for a mortgage. However, it’s possible to still get a mortgage with a shorter work history.
It’s just more difficult. You will have to prove that you are employed with a good salary and a stable career track. It can also help if your job is in the same field as your degree. Also, to get a mortgage with short work history, it’s very beneficial to have a larger than usual down payment and a high credit score.
Finances and work history aside, one of the primary factors that will determine your decision as to whether to get a mortgage or not when you’re new to the workforce is your career prospects, expectations, and opportunities. When you own your home, it can drastically reduce your flexibility in pursuing other job opportunities.
For instance, you wouldn’t be able to simply move halfway across the country. If your career opportunities suffer because you have a mortgage, it could also mean you’re reducing the opportunity to climb up the career ladder and make more money. Therefore, it could make sense to start making more money and embrace professional opportunities before you get a mortgage.
On the other hand, even if you’re new to the workforce, if you’re working for a highly stable company in a role that you love and you don’t intend to leave, then getting a mortgage can make a lot more sense. The earlier you take out a mortgage to buy a home, the sooner you can pay off the loan and own your very own property.
Besides, the property is one of the best investment choices and, unlike paying rent, each month you pay off the loan. Therefore, you’re building up the amount of equity you own in the property.
If you’re only just beginning your career journey and are looking forward to working in different roles and locations, it might be best to delay getting a mortgage. But if you’re new to the workforce and are exactly where you want to remain, finding a mortgage lender so you can purchase your own home might be precisely the right thing to do.
Take the things in this article into consideration and weigh up the pros and cons based on your personal circumstances, and you will make the right decision.