One of the most common questions that I get from people is usually around the fact that I am a homeowner, a young one, and “how/why did I do it?” I’m twenty-six so I’m not super young compared to other people that are buying but I did buy my home when I was twenty-five. It’s a condo, to be more specific which is the perfect size for someone like me (and my dog, boyfriend, and unborn child).
My path to buying my place started with my dad. He urged me to look at places as I was renting and trying to find places that would take my dog. I have a Pitbull mix, and unfortunately, apartment complexes have an “aggressive breed” rule that stereotypes a lot of breeds. My Rocko falls into that even though he’s probably the nicest dog ever. Anyways, my dad pushed me a year before I decided to take it seriously and do it.
To be clear, I have rented a lot. I have rented with friends, and I have rented by myself since I was twenty-one. That’s five years of renting. There are many people out there that have been renting longer than me, and that’s probably their cup of tea. It wasn’t mine, though. I didn’t like having to drive to the leasing office to turn in my rent or being charged for a dirty bathroom even though I got down on my hands and knees and scrubbed it clean. Landlords and leasing offices can get away with a lot; I will say that.
So yeah, I looked into buying my place because it was a better fit for me. No more pet rent, no more people running around in the place above me, no more missing packages. There were a lot of positives when I compared to the things that I had gone through.
How did I buy my home? And, how can you buy a home?
So many things went into the process of buying my condo. It wasn’t a one and done type of thing where I could just pick out a place and make it mine. I wish things worked out that way, but they do not. If they did, I would be in a different condo that was a bit cheaper and had some installations that my place does not have. But, that’s not the point. The point is that it is a lot of work which I feel deters a lot of young people. It shouldn’t, though – if you work with a reputable team.
Before I dive into the details, let me be real with you. I have debt and I was able to do this. I have talked to people that think because they have student loan debt that they can’t do this which is wrong.
Excluding my utilities and payments that go along with my home, I have:
- Student loan debt
- Car payment
- Health/Dental Insurance payment
- Dog health insurance payment
And, I’m able to do this. Don’t let your debt and bills scare you away.
This is what you need to look into:
Do your research.
I think many people get turned off when they hear about other people’s process with buying their home. It sucks because every experience is different. There are people that I know that had an easy process and others that have a long drawn out process. Some people stuck to one lender and didn’t explore their options or they didn’t have a realtor/someone on their side to hear them out and make things work for them.
Yes, you need to do your research so that you can have a great process. No one is going to do it for you. You need to figure out what documents you need to collect and share, what lender you want to work with, which realtor will be the best fit for you and more. It’s not a lot of work if you have a referral group that you can turn to for contacts. Don’t forget to consider the area you want to move to – I live in a suburb outside of Columbus, OH so I can have the city life if I want while not having to deal with downtown traffic every day. Make sure that you consider the location that you want to live in and your commute to work. I made sure to include those in my decision-making.
Work on your credit.
Your credit score is going to determine a lot of things for you – from your interest rate to the amount that the bank would allow you to spend. Your credit should be established in some way when you start this process. You can pay your bills on time every month, but that doesn’t mean much. The bank wants to be able to see how you handle your debts and payments. It seems annoying, but that is their strategy to figure out if they can trust you will pay back the mortgage loan that they are going to lend you.
On my end, I had student loans that I was paying into since I signed up for them which helped me build my credit. Along with getting a credit card, I had started to build my credit early. And, I was lucky enough to have a dad who has great credit and added my name on his credit card for a year – this helped out a lot. If you’re planning on buying, start establishing your credit now. Better now than never. Keep up on your payments and avoid having collections pop up on you and knock your score down. Show the lenders that you are reliable and that you will pay them back.
First-Time Homebuyer’s & Other Programs
Don’t skip out on these programs. Many people don’t know that there are programs out there that will allow you to purchase your first home. I was able to utilize the First-Time Buyers program within HUD and a portion of my fees. The total out of expense costs that I should have paid was around $8,000. That included my down payment and closing fee. In the end, I only had to pay $3,500 of that $8,000. That’s a pretty good deal to me, and you can have that opportunity, as well.
The programs aren’t limited to First-Time Home Buyers; you can qualify for buying a fixer-upper, rural area home, or graduating recently. There are so many options, and you should look into them.
Create a budget.
When money is involved, a budget needs considering. If you can live life without a budget then go you, that’s great, but many of us are creating budgets. When you meet with your lender, and they create your buying budget, it gives you some perspective, but it doesn’t stop there. You need to look into your bank account and tally up what you will be willing to spend and how much you want to put into everything. You can have a maximum of $200,000. But do you want to splurge on a $200,000 home when you can find one that is similar but $20K less?
A budget is going to keep you and your account in check. You will know your spending point and keep to it. Many people think about budgeting and dread it but it’s a great practice. You have things to think about like extra fees — closing costs, inspector costs, updates, and moving costs. Start saving now if it’s in your plans to purchase soon so your budget is off to a good start. Your finances will thank you for paying attention to them.
Don’t settle for anything.
It’s a constant theme through life but you shouldn’t settle for anything. Don’t settle on a house just because it’s in your spending range. Don’t let the seller get you. There are going to be moments where you are at the dilemma of choosing and you shouldn’t choose because you might miss out. You want to be comfortable with your choice.
And, you want to feel great about your choices. You should vet everything that comes to you. When you get that inspector report, vet it to the point where you are comfortable. You want to make sure you get everything you can out of the seller when it comes to simple repairs and you want to continue to vet after the repairs are made. Create your list of needs/wants and let that keep you on track — it’ll help you not settle for less (but stick to your budget).
Buying your own place is a big decision and you want to cross all of your t’s and dot your i’s.
My last piece of advice would be to never be afraid to ask questions and lots of them. I asked so many questions and I don’t regret it at all. You need the answers to everything.
It will be one of the most adult things you do and you want to do it right! Trust me on that.
If you’re looking to purchase your first place, don’t hesitate to reach out and get some answers from me. I’ll answer to the best of my ability. And, if you’re interested — here are six tips for buying your first place: click here.
Are you a homeowner? What are some tips you would share with people looking into it? Do you have any regrets?