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Ask Marietta: Buying Your First Home

Video description

In this video, Marietta answers a question from a young woman in graduate school who wants to know how she can buy her first home while managing her student debt.

Video transcript

Hi everyone it’s Marietta with the Consumer Action Handbook and I’m here to answer some questions from you, consumer questions, that may be able to help you in your daily life.

We got some many questions after our Google Hangout and we want to just keep answering questions that you may have, so with that said, let’s jump right in.

The first question comes to us from a young lady. She’s a recent college graduate and she’s in graduate school now. She says she’s interested in buying a house, but she’s a little concerned because she lives in a very expensive area — the DC metro area, which is a very expensive area — and then also she has student loan debt and she’s in graduate school right now so she’s going to increase the amount of student loan debt that she has. And she just really is concerned about how she can make this dream a reality.

So I can definitely relate to this as a young professional living in the DC area. I also can relate to how expensive it is here and just that desire to be able to buy a home.

I have friends back in the Midwest who’ve bought lovely and fabulous homes, and I don’t know when that’s going to be a possibility for me.

But I try to keep this in mind and I hope she will too, that it’s a marathon not a sprint. You don’t have to buy a house right away and we want to make certain that we can not just buy a house, but we can keep our house.

And that involves having some reserve funds for emergencies, for being able to make payments on other things, utilities, taxes, and just things like that.

So even though she’s not making a down payment today there are things you can do every day to help make that goal become a reality. And I just want to share a few of them with you.

First I would suggest to save regularly.

It’s so tempting to want to buy the new fabulous pair of shoes or take every vacation with your friends, but knowing that you need to take care of yourself and your savings first is a crucial thing in this whole marathon of buying a house.

And so yes, you should definitely have some money budgeted for fun things and activities with friends and family, but make certain that you’re making saving a priority in your financial portfolio.

And if you need help on knowing how to save particularly for young adults there are some resources on mycreditunion.gov that are specifically geared toward our savings goals and things that we’re facing.

Another place that you can go is publications.usa.gov. There’s tons of government money and saving and investment resources there that you can order or download.

So that’s one step: saving regularly.

Another is pay your bills on time.

You’d be amazed how important that is as you’re trying to apply for mortgages down the line. It helps determine what sort of interest rate you get, what sort of programs you’re eligible for. It shows you’re a responsible creditor, that you pay your bills on time and can manage your debt. It’s crucial when lenders are looking to determine if they’re going to give you a mortgage loan.

So I would suggest that you pay regularly on your credit, on all your bills.

The third thing I would suggest is look into repayment plans for your student loans. She mentioned that she’s a federal employee, and the Office of Personnel Management offers a repayment plan for people who are federal employees so that their student loans can be reduced, and that’s a significant lift of your mind if you know that you don’t have to pay everything back out of your pocket for your student loans since there’s some help available.

And maybe you’re not a federal employee, there’s still other programs available if you’re a public servant, police and teachers, they often have similar programs in cities and states or jurisdictions for repayment of loans.

And some companies actually have student loan repayment programs.

So take heart on that. That may be a possibility too.

So I would say keep the faith, stay encouraged, and keep working hard and finish graduate school and don’t really worry about this in the day to day.

But just do all these things together to help you be on the path so that you’re able to buy a house and enjoy it and not worry.

So thanks for your question!

If you have questions, we’d love to hear from you. We’re still taking them and answering questions as you can see.

You can write us (Ask Marietta, 1800 F St. NW, Washington, DC 20405), you can email us (askmarietta@gsa.gov) or you can tweet us using the hashtag #AskMarietta. Thanks!