Buying Property After Graduation
REM #F753
By Ilyce R. Glink
Summary: A ThinkGlink reader will be graduating from school in one year and is planning on buying a condo. He is considering using some of his student loan money for the down payment. Ilyce explains how this reader should evaluate his financial future.
Q: I'm currently in graduate school and have one more year to graduate. My
tuition is paid for, but I have to take out loans for my living expenses.
I'm considering buying a condo once I graduate. Do you think it would be a
good idea to take out the smallest school loan out for my remaining year and
apply for 100 percent financing once I'm ready to buy the condo or should I
take out the maximum loan amount and use the money as a down payment? I have
great credit.
A: It's almost impossible to get 100 percent financing right now. In the wake
of the collapse of the subprime market, most of the 100 percent financing money
has dried up, except for loans backed by the Veteran’s Administration.
So, if you can borrow more money from your student loans, you may want to do
it. But remember, you'll need to start paying that loan back 6 months after
graduation, and student loan interest rates aren’t that low.
What you should do is your homework: Take out a piece of paper and jot down
how much income you’ll have once you graduate, as well as the cost of
paying down your debts plus living expenses. You’ll want to make sure
you’re earning enough to pay your bills. Then, you can calculate if you
can really afford to buy a condo, and decide whether the amount you have to
spend will allow you to live where you want for the next 5 to 7 years.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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