19 Mistakes College Grads Make When Finding Their First Apartments

You aren't being graded on your apartment hunt, but you still want to get it right.

Finding your first apartment after college is a big undertaking — it can be hard to know where to start when you’re staring at a stack of listings and the money from your new job is burning a hole in your pocket. And you’re new to all this, so you’re bound to make some mistakes along the way.

But we can help. Take a look at some of these common slip-ups so you can do your best to avoid them as you search for a new place to hang your cap (and gown … see what we did there?).

1. Starting Your Search Too Early

“Generally, the best time to start looking for an apartment is no more than three weeks before your move-in date,” said Margaret Fanney, a licensed real estate agent at Triplemint in New York City. But once it’s time to start your search, you want to make you aren’t …

2. … Underestimating How Much Everything Costs

Whether you lived in student housing and paid on a semester basis, or you are moving to a different state (or even different city) post-graduation, getting your first apartment can be a big financial adjustment. (Still deciding if you want to move somewhere new? Check out these 15 best cities for college graduates.)

You can use the time before graduation to research how much apartments are in the areas you’re considering and what costs you might pay for additional amenities.

3. Not Planning for Expenses Beyond Rent

Most people think about the monthly rent check (or charge, if your landlord lets you pay rent by credit card), but that’s not the only expense you’ll face living on your own. Think about other necessities like laundry detergent, toilet paper and groceries. And remember, there are ways to save on your daily expenses — like making this delicious 16-cent breakfast.

4. Leaving Student Loan Payments Out of Your Budget

“Monthly payments for student loans are often overlooked … because student loans come with a six-month grace period before you have to start making payments,” said Brandon Yahn, founder of Student Loans Guy.

5. Forgetting About Credit

Most landlords look at a version of your credit report as part of the application process. Things like credit cards or loans (ahem … student loans) are impacting your credit. (You can read more about what factors influence your credit scores here.) Depending on how far into the world of credit you’ve ventured, your credit file may be pretty thin. Not sure? Now’s the time to find out — take a look at a free summary of your credit report on Credit.com.

6. Not Gathering What You’ll Need

“Graduates usually rush to find an apartment without contemplating on the requirements for renting an apartment,” Kobi Lahav, managing director of Mdrn. Residential in New York City, said. “They don’t have any offer letters ready, pay stubs or bank statements.”

7. Not Talking With Your Guarantors About Their Essential Paperwork

Once you’ve gathered all your paperwork, it’s important to also remind any guarantors of what they’ll need, as “springing it all on [them] at the last minute is guaranteed to cause delays and frustrations,” Fanney said.

8. Not Brushing Up on Terminology

“[Recent graduates] don’t typically know the difference in rental versus condo versus co-op building,” Greg Moers, a licensed real estate agent at Triplemint, said. “They tend to just shop for what looks awesome and do not take into consideration the process involved with putting together a board package and the cost.”

To get you started, check out this guide that deciphers 16 confusing mortgage terms.

9. Choosing the Wrong Roommates

Fanney suggests comparing schedules and lifestyles to see if living with a particular person is really a good idea.

“You should already be thinking about things like each person’s tolerance for mess and budget, but now that you have your first full-time jobs, you’ll have to make sure the lifestyles can coexist peacefully.”

10. Not Getting Roommate Agreements in Writing

Even if you’re living with your best friend, it’s important to write out responsibilities and agreements you’ve made about the living situation. You’ll also want to outline how bills will be paid and who is responsible for what. Hopefully you’ll never need to reference this for any reason, but you’ll be glad to have it all in writing if things go bad.

11. Not Considering Apartments With Fees

We know, all those fees are the worst. But some of these upfront costs, while painful at the time you see the money coming out of your account, may mean paying less over time.

According to Chelsea Werner, a Bold New York real estate expert, many of the no-fee apartments just add fees to your monthly rent. And, if that’s the case, “although you will pay less upfront, over time it will even out, as you will be paying more per month.”

12. Forgetting to Meet Potential Neighbors

“In college, your neighbors were probably other college students, but that probably won’t be the case now,” Fanney said. “Don’t let that stop you from getting to know your neighbors and finding ones you can trust.”

13. Not Factoring in the Landlord

“It’s sometimes better to pay a premium to be with a better landlord than to pay less and be with a bad landlord that doesn’t fix anything and is hard to reach,” Lahav said.

14. Skimming Over the Lease

In a time when we all just click “next” anytime we install an update on one of our devices, it’s easy to flip to the end of the agreement and sign on the dotted line. But it’s essential you know what you’re agreeing to and negotiate things that you’re not quite on board with.

15. Not Knowing Your Tenant Rights

Tenants (and even applicants) have federal laws protecting them. And, in many cases, there are state laws that help protect you too, so you’ll want to do your research and find out what legal rights you have ahead of time.

16. Passing on Renters Insurance

Renters insurance may seem like one more expense, but just like car insurance, having it may ultimately save you money in the event of a problem. You can read about the little-known ways renters insurance could save you money here.

17. Only Looking at the Bottom Line

“Graduates are very price-sensitive, so they will usually go with the cheaper apartment as their rule of thumb,” Lahav said. “However … they don’t realize that sometimes a cheap deal is not the best deal for them.”

18. Holding Out for Perfection

Apartment hunting can be a lot like a relationship — you start out with a list of ideal qualities, but the odds of finding someone (or some place) that meets all these may not be realistic.

“Regardless of your budget, there is no perfect apartment,” Werner said. “Renting is all about tradeoffs.”

19. Forgetting About What Comes Next

“When looking for an apartment, people have a tendency to not think about a rental as more than a one-year commitment,” Werner said. But, unless you have reason to move, you probably won’t want to go through the hassle. So, that’s why Werner said it’s a good idea to “think about how that unit will fit your life in the next few years.”

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Is a 50-Year Mortgage a Good Move?

Sure, it will keep your monthly payments low, but it will end up costing you a lot in the long run. Here are the pros and cons of a 50-year mortgage.

Are you looking to afford a new mortgage? A 50-year mortgage may be an option, but here are some things to consider when looking at a long mortgage term.

These loans are not bought and sold by Fannie Mae or Freddie Mac. They are smaller banks and portfolio lenders that offer unique financing and, as a result, will charge an additional premium. You can expect your interest rate and fees to be above market. By above market, we mean at least three quarters of a discount point higher in rate than the Freddie Mac mortgage market survey. This type of loan effectively is an interest-only mortgage that is similar to the interest on the loans that were available before the financial crisis.

The 50-year mortgage is pretty much what it sounds like — your loan is amortized over 50 years, similar to the way a 30-year, fixed mortgage is amortized over 30 years. At the end of the loan term, the loan is paid in full. A 30-year, fixed-rate mortgage typically translates to paying double the amount of money you originally borrowed. With a 50-year mortgage you will pay almost four times the amount of interest on the amount originally borrowed. Yes, such a loan term would be incredibly expensive — the cost of having a lower monthly mortgage payment.

Are You Biting Off More Than You Can Chew?

If you are comparing a 30-year mortgage to a 50-year mortgage, you might be trying to purchase more than you can handle — not a prudent move if you’re trying to take on something affordable. While the mortgage payment might be affordable, it would also be an incredibly expensive financing vehicle. For all intents and purposes, this is practically an interest-only mortgage

Interest-only loans can be beneficial for a consumer who has big liquidity in the bank, excellent credit and is otherwise sophisticated in mortgage finance, while looking for cash flow. (Don’t know where your credit stands? You can get your two free credit scores, updated every 14 days, right here on Credit.com.) For everyone else, a 30-year fixed rate mortgage is substantially less expensive than its 50-year counterpart.

If you were thinking about this type of financing, you may want to reconsider and speak with a professional — someone who can guide you on what type of income may be needed to qualify for the purchase of a home.

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