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Sue in St Pete

housing after college graduation

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One of the "helicopter mom" things I think about...

 

I've always admired by BIL who encouraged his dds to return home after college graduation, save half their pay, and put a down payment on a condo/townhouse/house a year later.  The dds who've done this have theoretically reaped the benefits of home ownership.  One has already traded up for a bigger house for the children coming along.  They live in the Chicago area.

 

After I graduated, I rented for many years until I married at the ripe old age of 31.  In one way, it was beneficial because I moved to grad school after working for 3 years.  OTOH, because dh changed careers which included a stint back in school, several moves, and tax benefits from ministry housing, we still have 10+ years to pay on our mortgage (at the ripe old ages of 54/64).  Our last move was in 2004, and our house is still not worth what we paid for it back then.  :crying:

 

I don't expect ds to move back to the area when he graduates because our local economy/industry would not be attractive to a young engineer.  I think about suggesting that he find a roommate when he graduates and settles into his first job, but I sure did not do that.  I made $25,000/yr when I graduated in 1984, and never even considered a roommate.

 

And then, I wonder if housing is such of a good investment anymore.  Ours sure has not been.  I listened to a radio show that talked about how it's not so beneficial in this day and age of disloyal companies and greater geographic mobility.  It's rare that people spend 30 years at a company anymore.  And, having the "burden" of a mortgage can limit job prospects if needed due to layoff, etc.

 

I guess one exception would be if you lived in a large metro area (like Chicago) where there are plenty of other job prospects if needed/wanted.

 

So, I know there are people on this board who have dc who are graduating college or have already graduated college.  Did this kind of a conversatioin ever come up?  Did you have any words of wisdom for your dc?  Want to share your thoughts?

 

Thanks!

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Both of my kids are likely to live pretty transient lives for a good number of years, since they are both trying for careers in the performing arts. So, home ownership is not even a blip on their collective radar.

 

My daughter was so young when she graduated that the only plan that made any sense was to have her come home for a couple of years. She worked and was able to save a nice chunk of money as a nest egg, which she then used to make her move to the big city. My son saw how well that worked out for her and is currently planning to follow the same path, although probably only for a year or so.

 

 

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Our oldest is in grad school. While she is earning decent money as a grad student and has even considered buying a condo, the idea that she would be moving after five years NO MATTER WHAT served as a deterrent. She is waiting to buy until her life is more settled.

 

#2 has lived at home for the past three years, working and then getting a M.S. We'll  have to see how much of a hurry he is in to buy once he gets a job.....

 

#3 actually investigated buying. He was 21. Even though he had the down payment and sufficient income, he didn't have any credit history so every bank said they wouldn't even consider giving him a mortgage. He did go and get a credit card in his own name immediately after that..... I'm sure he'll try again soon, but his feelings were rather hurt.

 

The idea that you have to have a history of indebtedness before they'll give you a mortgage is weird. I mean, if your bank account and income is enough, shouldn't that be all that matters/

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We plan on playing it by ear.  

With today's economy, it wouldn't surprise me if all of our kids had to live at home for some period as adults, possibly even married adults.  We are encouraging them to save as much as possible before moving out, no matter when that might be.

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#3 actually investigated buying. He was 21. Even though he had the down payment and sufficient income, he didn't have any credit history so every bank said they wouldn't even consider giving him a mortgage. He did go and get a credit card in his own name immediately after that..... I'm sure he'll try again soon, but his feelings were rather hurt.

 

The idea that you have to have a history of indebtedness before they'll give you a mortgage is weird. I mean, if your bank account and income is enough, shouldn't that be all that matters/

 

This is exactly why my oldest just got a credit card.  It has a low limit, but dc will be able to use it for purchasing gas and can pay it off in full each month.  In a few years, if buying a house is part of the plan, there will be a credit history.

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Oldest got married before he graduated from college (had one year left).  He and his wife rent a trailer in a nice park filled with other students.  They don't pay much in rent, so get to save quite a bit and have a nice, tidy sum being saved up for a downpayment if they want to buy at some point down the road.

 

He had no desire to return to our area after college.  He loves the area they are in (just a couple of miles from his college).

 

Middle will be heading to med school.  He won't be staying at home at that point and likely not thereafter either.  We have discussed perhaps living in HIS basement later on in life though.  ;)

 

Youngest will likely want to live in a tent somewhere in the wild.  Again, I doubt it will be near where he was brought up.  Time will tell.

 

We brought our kids up to think of themselves as world citizens rather than "our local area" citizens, so it's no big surprise that they aren't planning on returning home.  There's a big world out there and they'll find their niche in it.  We can still help (some) financially as needed.

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Even though he had the down payment and sufficient income, he didn't have any credit history so every bank said they wouldn't even consider giving him a mortgage. He did go and get a credit card in his own name immediately after that..... I'm sure he'll try again soon, but his feelings were rather hurt.

 

The idea that you have to have a history of indebtedness before they'll give you a mortgage is weird. I mean, if your bank account and income is enough, shouldn't that be all that matters/

 

 

This is exactly why my oldest just got a credit card.  It has a low limit, but dc will be able to use it for purchasing gas and can pay it off in full each month.  In a few years, if buying a house is part of the plan, there will be a credit history.

 

Something similar happened to my sister.  She actually had a credit card, but paid it off every month.  Because she paid her bill in full every month, she had no credit history.  To obtain credit history, she had to pay off the debt in installments.  At least that's what I remember.  How crazy is that?

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That's odd.  Everything I've read says it helps your credit score if you pay in full each month.  Maybe practices have changed since your sister was young. 

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That's odd.  Everything I've read says it helps your credit score if you pay in full each month.  Maybe practices have changed since your sister was young. 

 

Yes, that was probably 25+ years ago.

 

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We're on the outskirts of a large metro area.  It is very, very common for recent graduates to live at home the first few years because housing is indeed so very expensive.  Ours expect that. 

 

In our area, buying is not a bad thing, but I would advise against a condo or townhouse.  They don't hold their value.

 

And you have to be thoughtful about where and what you buy.  One of my supervisors had trouble selling their house when they relocated, but it was a bit off the beaten path and had a pool (unusual for this area).  It did sell for what they hoped, but it took awhile.

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If you want a credit card and your child is below age 21, my bank's advice is to stay at the same bank for years, get a healthy balance on your account, do direct deposit for all paychecks, and then apply through the bank for a credit card. The bank can personally recommend your student, and the recommendation can override all of the "we don't give credit cards to people under 21" rules that are in place.

 

The other route is to get an easier-to-get credit card, like Discover, and after using that for a year or two apply for a major one.

 

But do have your child get his own credit card in his own name ASAP!

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We expect that either our kids, nieces or nephews will land back on the farm after college.  They are welcome on the condition that they are saving for their own place which means they have a job.  Our kids know they can come back no matter what.  They all know they can't free load because if they don't have a job, Uncle/Daddy has lots of work for them to do. :)  Which if they are just being lazy, starts with mucking out a cow stall and going down hill from there! LOL

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If you want a credit card and your child is below age 21, my bank's advice is to stay at the same bank for years, get a healthy balance on your account, do direct deposit for all paychecks, and then apply through the bank for a credit card. The bank can personally recommend your student, and the recommendation can override all of the "we don't give credit cards to people under 21" rules that are in place.

 

 

Is this a thing?  I thought they could get credit cards at 18 (assuming an income)?  

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Is this a thing?  I thought they could get credit cards at 18 (assuming an income)?  

 

My daughter got a credit card at 19 through a credit union. She had maintained a savings account with a tiny (like $200) balance for a number of years, had never had anything direct deposited.etc, She did have income, but her paychecks went into a checking account at a different bank. She applied and was approved for a card with a low limit within about an hour.

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Is this a thing?  I thought they could get credit cards at 18 (assuming an income)?  

Judging by the credit card offers my 18 year old has been getting in the mail since her birthday, I assume that one can get a card at that age.

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It would be pointless for our kids to return home after college, because we live in a very small town and they would find no job opportunities here (in their fields).  That said, our kids know they can do that at anytime, and they've all taken off time post-high school to live at home for at least half a year.

 

That said, we do not plan to live here forever;  we'd like to move to a metropolitan area where both my husband's and my families live, near an airport!  The airport part is important because I'm quite sure our children will be living all over the country if not the world eventually.  :)  We'd probably get a town home and it would have an extra bedroom for any child who needs a place to stay for however long.   That area is kind of the central hub for our family and everyone passes through it, goes to college there, works there, or lives there at some point.

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DD and husband are going to be transients. His field is not one that is conducive to being employed in any one local for more than five years at a time and more like two or three at least for the foreseeable future. I don't see them venturing into home ownership, and they'd likely take a bath financially if they did.

 

Our senior heading to U of MI wants to be a journalist. He is the type to like a non urban environment with places to explore and likes roots, but his desired job beyond hoping to someday write the great American novel, is a writing job that includes travel. If he had his dream, it would be writing for National Geographic, Archaeology, Popular Science, or some other type of academic/educational periodical. He would take a newspaper job in order to get ahead. So, I guess I think that to start out renting is the best. If he can get experience, hone his craft, and become good enough at it to get on with a major magazine where it would be possible to have a long term home base and travel from there, I could see home ownership in his future. Still, that won't be Michigan for certain. Those kinds of jobs are not available here.

 

Middle boy should never be involved in home ownership. A. he has ZERO desire to do maintenance B. he will follow the grant money wherever it leads him so that is going to be all over the Great Lakes region, and if he gets his heart's desires will include some foray into temperate rainforest conservation as well which could put him in Myanmar and Thailand, British Columbia, Washington, or in a tiny area of the Appalachian range. He definitely would be financially hampered by owning a home.

 

Youngest wants to work for NASA as an engineer or an AIA company that does work for NASA. If he landed in Huntsville or Merritt Island, I could see him owning a home. But, if he is with an east coast company the in NJ, MD, VA corridor where housing prices have become insane, I think he's likely to be a renter.

 

While home ownership has been okay for dh and I since he has managed to work in the same region but for three different IT companies, I am not certain that it is the best idea for our kids. In the global economy, I think staying in one place for long is not likely in the fields our kids have chosen.

 

As it is, renting is still somewhat problematic due to having to pay to "break the lease" when the job changes. DD and hubby are in that boat. He was offered a much better position in upstate NY than his job in NJ, and they are going to make the move. But they have two months of rent - $2200.00 - still on their lease and he is supposed to start the new job right away. They can't get out of it despite the fact the company has a waiting list for their apartment - surprising in my eyes because I don't think it's anything very special at all! - so that's harsh on a young couple starting out. Rentals month by month seem to be pretty rare these days.

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We've found that an advantage for dc living in an apartment complex is that they don't have to worry about any maintenance - either doing it, or paying for it.  
This can be useful if the dc is in a demanding job, working overtime, etc., plus it makes budgeting easier.  This is especially helpful in areas where snow removal can be a significant task throughout the winter.

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I also live in a small town that would have no appeal to ds after graduation. I probably won't live here by the time he graduates either and I'm weighing the costs of moving closer to my school now. *sigh* 

 

As long as I have space, he is welcome to live with me after graduation. He has plans to live abroad, so I can see him landing at my place temporarily or having storage at my home while he "wanders." 

 

He hates yardwork and has pretty minimal needs, so if he purchased, I can see it being a condo or townhouse, but probably not for a long while. 

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I rented apartments for several years when I graduated, usually with roommates.  Finally, I purchased my own house with some money my parents had left me.

 

My dh did that for awhile, but then he ran into an interesting situation.  He had a friend at work that was a recent widow.  She needed to invest some of her money, so she went in with him and purchased the lions share of a home.  Dh found three roommates and they shared the house, paying her "rent" and he added more each month toward buying the home.  When we married, I sold my house and we paid his off.

 

It was a very unique situation, but one that worked out for everyone.

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People don't stay put as long as they used to and not all housing markets make home ownership a good investment. I'd rather our kids come back home and pay off any student debt they have and build a decent emergency fund before they head out on their own.  DD will do that, as she's done with college but wants to either teach in Asia or go to grad school. She needs money for either one, and she has a small student debt so it makes sense for her to come back home for a year. 

 

 

 

 

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My oldest did end up back here for much of a year after her first Master's, but that was because of Ed's death. We knew she wouldn't be staying. Navy girl, of course, moved multiple times after Commissioning, though she will now remain in the SD area for another 3 years! They've looked into buying a house, but the market is SO tight in SD that I think they're planning on staying where they are. They get really good housing allowance and their place is on the beach...  :laugh:  Army girl will be heading to deployment, so no permanent address for her, along with AF guy. 

 

I realized this month that I have one just finishing a deployment, one on detachment, one about to leave on detachment, one headed to LDAC and two headed overseas. At least my last one is only headed to Scout camp. Where did I get these travelin' kids???? 

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My oldest son rents one-third of a three bedroom house. Each one has their own bedroom and they share the living space, kitchen and bathroom.

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I actually think about this a lot too. I don't really have any desire to stay here once the kids are grown, so I almost think I would be willing to move anywhere, and if we could move somewhere that would help the kids in the early years after college, I would definitely consider it. However, both kids may not wind up in the same area. It is just so expensive to pay for all the expenses of a household for just one person. I hope that we can help them when they first graduate, I am just not sure that coming back here would be where the best jobs would be. I want to go back to school myself when they are in college, so I could see myself moving for that.

 

I would encourage them not to buy until they knew they were going to be in one spot for a while.

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The idea that you have to have a history of indebtedness before they'll give you a mortgage is weird. I mean, if your bank account and income is enough, shouldn't that be all that matters/

 

Would you loan $200K to a person who came and knocked on your door if they could show you their bank account statements and paystubs saying they made enough to currently pay the minimum monthly payment at 5% interest? If not, what kind of security would you want that they would continue to pay the loan?

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That's odd.  Everything I've read says it helps your credit score if you pay in full each month.  Maybe practices have changed since your sister was young. 

 

 

Totally OT, but the highest credit rating is achieved by this:

 

At least three lines of credit cards.  Pay two in full and let one report at under 10%.

 

Have not just revolving credit (cards) but also installment.

 

You get more points by having a variety of types of credit.

Your point system is also based on average age of accounts.

And then there is debt to income ratio.

 

You think we're fans of SWB?  You should see the fans of Fico over at the CreditBoards and MyFico forums.  You can learn a lot in a short period of time, lol.  They constantly do studies and print up pie charts and graphs showing how to achieve the highest scores and impacts of choices (carrying % balance and number of cards, etc.)

 

It's actually pretty fascinating if you like this sort of thing. ;)

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We have always told DD that she will always be able to stay with us if she wants to.

 

However, she would have to take the bad with the good, and we are older parents with demanding jobs living in a pretty small one story house.  That means that things have to be (probably unreasonably) quiet after about 9:30, which is really, really hard on someone in their 20s.  So I don't expect her to want to stay here.  Still, she has a fallback, which is important since her field is not a lucrative one.

 

If she was finished with college and wanted to come home to live, I think it would be a period of transition to her next move. 

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