The American Dream of Home Ownership: 10 Things You Can Do as a Student

(This is a guest article by Kyle Chezum*)

College students often take home ownership as a fact of adult life — as something inevitable that will happen when it happens. But homeownership requires real effort, commitment, and responsibility, many college students aren't sure what steps to take to meet these requirements. The following ideas will help get you started on homeownership before you graduate.

1. Put some thought into it. Are sure you want a home? Is it part of your future plans? If so, make it a goal. Work toward it. If you're not intentional about getting there someday, you won't. Simple as that.


2. Get a job. This is much easier said than done, of course, but do what you can to earn an income. You need money to buy a house, but you also need a steady employment history. Start building up your resume as soon as possible.


3. Build up your credit score. Get a credit card or two—no more than that, though—and charge small transactions now and then. Pay off the balance monthly—never let a credit card charge carry over from one month to the next. Maintain tight control over your accounts. Don't use the cards to build up debt—that's the opposite of what you want. Using of the cards over time will provide you with a healthy credit score, which is critical if you plan to purchase a home.


4. Avoid student loans if possible. Paying back student loans can help build your credit as well, but the monthly payments that will come due when you graduate will cripple your home buying ability for several years at least. Borrow the smallest amount you can in student loans. Don't use your loan money to buy a laptop or a new phone. Keep yourself financially lightweight.


5. Buy used books. You know the drill. Used books can cost hundreds of dollars less—especially online—than the shiny new ones in the bookstore. A few hundred dollars in savings every semester can reduce the amount of student debt you take on.


6. Drive a clunker. This one is controversial. Older cars come with higher repair costs than new cars, but new cars are just plain expensive. You'll have to weigh the financial pros and cons of this one yourself, but whatever you do, don't use debt to finance a car. You can get by without the Mustang or the Sebring convertible. You'll save on insurance, too.


7. Skip spring break. Sorry, but spring break vacations are often extremely expensive. A spring break adventure in Cancun will likely cost you between $1,000 and $1,500, and that's if you're on a budget. If you were able to save $1,500 each year for four years, you would have $6,000 of cash on hand—which is equivalent to the average closing cost of a mortgage.


8. Learn basic maintenance. One of the costs associated with homeownership is maintenance. If you can learn how to make minor home repairs yourself, you can save a hefty amount of money as a homeowner, which will lower your monthly ownership costs and allow you to devote more of your income to your mortgage. You can paint the entire exterior of your home for just a few hundred dollars instead of the two or three thousand it would cost to have it done professionally. Learn these skills as soon as you can.


9. Learn about real estate. Buying a home and taking out a mortgage are not simple things. There's a lot to learn. What neighborhood should you purchase in? How long should you keep the house before you sell it? Are property values increasing or decreasing in your area? Learn how to understand these things. Stay up to date on the industry. Compare home prices, compare mortgage rates, and keep your eyes open for opportunities. Read a book or two on the subject. Talk to a local broker. It will help you immensely down the road.


10. Save money. Save, save, save. Save every penny you get your hands on. Put it away. Don't think about it. Open a savings account and fill it full. You don't need to eat out three times a week, and you can skip out on movies now and then. Your friends will understand. Tell them you're buying a house—it'll make for good conversation, if nothing else.

*About the author: This guest post was provided by Kyle, a content specialist at Lender411.com. This site helps homebuyers compare mortgage rates, find local lenders, and locate the best mortgage packages available.

*Image Credit: Photograph by Aditya Grandhi [via Flickr Creative Commons]

This article has been featured in the Carnival of Personal Finance #271.