Graduation Meets Foreclosure In The Housing Market
Arinze Emeagwali plans on buying a home when he graduates. He already accepted a job in his native New York City and will begin work less than two weeks after graduation which is set to take place on May 10.
The Telecommunications Management major has saved about ten thousand dollars toward the purchase of a house, and throughout college has never applied for a credit card because he heard what they can do to a college student’s credit.
“I prefer to save my money and improve my credit now so that my financing will be at a lower rate in the future.” Emeagwali said.
While graduating seniors are considering work, or continuing with their education, there is another important factor that requires a lot of thought: Where will these new graduates live? How will they pay their rent, or a mortgage, and who can they ask for help?
With the recent news surrounding the increased number of foreclosures in the housing market, some students have chosen to stay away from buying. Tamekia Pitter, a Senior Accounting Major from New York decided to rent an apartment from her parents when she graduates.
While renting from her parents, Pitter will be building her credit and helping her family pay their mortgage.
According to Forbes’ list of the ten most expensive cities to live, New York ranked sixth behind Essex County and Cambridge, Mass., San Francisco and San Jose, Calif, and Honolulu.
The financial decisions that many graduating seniors made while attending Howard University have come back to haunt them. Paying credit cards, skipping payments, maintaining overdraft accounts and loans, have all made it harder for students to even consider buying a house.
Income, savings and monthly expenses play an important role in determining how large a mortgage payment one can afford. Having bills outweigh income will hurt. One popular choice that students have made is finding a roommate.
Martinique Guillory, a Senior Public Relations’ major from Oakland, decided to have a roommate when she returns home. “I have two roommates now, and we equally share the rent and utilities.” Guillory said. “It’s convenient, and I’m paying a third of what I would have been paying if I were renting by myself.”
Although she has received a job offer upon her return to Oakland, Guillory felt that buying a house was a decision that could wait.
Oakland is also a city ranked amongst one of the most expensive to live, ranking eighth on Forbes’ list, immediately following Tucson, Ariz.
According to polls taken by MonsterTrak’s 2007 survey of college students and recent graduates, 48 percent of 2007 graduatess said they would go home, and 42 percent of 2006 grads still lived at home.
The decision to move back home is viewed as the most sensible means of saving money when the chance of paying rent is low or nonexistent. However, many students are more likely to find jobs in the city, or just rather stay in cities where, unfortunately, the cost of living is expensive.
Traditionally, a majority of seniors plan to rent upon graduation, but in the event of looking to own, Forbes’ cheapest cities to buy or rent list Minot, N.D., Killen and Arlington, Texas, Grayling, Mich., Topeka, Kan, Canton, Ohio, Tulsa, Okla., Billings, Mont, Fort Worth, Texas and Cadillac, Mich. as the top ten most affordable places to live with prices well under $200 000 for homes with four bedrooms and two and a half bathrooms.
At a time when people are looking to buy, students should consider the news coverage of others who have acted unlawfully to avoid foreclosures on the homes they cannot afford.
“There are a growing number of arrests of homeowners whose homes are being foreclosed upon and then suspiciously burned down.” James Quiggle of the Council Against Insurance Fraud said.
In January a Texas man was charged for allegedly setting his soon-to-be foreclosed home, ablaze. He also spray-painted racial slurs on the walls to make the incident appear to be a hate crime.
According to Elizabeth Weintraub, publisher of the free newsletter, Your Guide to Home Buying/Selling, in order to avoid taking these measures, help from a loan consultant is one of the most helpful steps anyone, including a student, can take.
If buying a home, the best way to avoid foreclosure is to prevent the filing of a Notice of Default, in order to do this, maintain a great relationship with your lender, so they do not file the notice.