lifestyle

Just a Couple of Young First Time Homeowners

Buying a house is a milestone that most people dream of. I feel beyond blessed that we have been able to buy a house that we love at such a young age. Although this was a fun and exciting ride, this process was anything but easy-breezy CoverGirl. I guess in the grand scheme of things, we had a pretty great experience, but it was definitely a journey to get here. When we started toying with the idea of buying a house we thought we knew a little bit about how the process would be, but there was so much more than we were expecting. I have had a lot of people ask me about our process and ask me to write an article about how we were able to do this. I thought I would lay out all the steps we took and what decisions we had to make. Hopefully, this can be helpful to some first-time homeowners.

Step One: Figuring out Your Finances

I really don’t know how anyone plans to buy a house without first establishing their household budget. You need to know how much you make, how much you spend on things, and most importantly, how much you will be able to pay for your monthly mortgage payments. I believe this should be figured out before you start getting preapproved.

In our experience, we got preapproved for wayyy more than we would actually be able to comfortably spend on a monthly mortgage payment. To give you an example: If you get approved for a mortgage for $300,000, you’re looking at spending about $2,000 a month on your monthly payments, depending on your interest rate and insurance payments. A bank may look at your debt to income ratio and say this is feasible for you, but they cut it to the bare minimum. One thing you don’t want to do when buying a house is to become house poor.

Step Two: Get Pre-approved

Before you even step into an open house or begin your search, you need to get pre-approved. If you don’t do this first you are going to have no idea what you can afford. Another big tip is: You need to shop lenders. Don’t go with the first quote that a bank or lender gives you. A lot of lenders will tell you, “that’s just what the interest rate is right now,” or “this loan is better than another,” or even, “your credit isn’t good enough,” and that’s just not always the case. We had some lenders offer us grants to pay for our closing costs and down payments but in the end, the most important thing for us was having a low-interest rate. We ended up getting a conventional loan at 3.5% interest rate and had to put 3% down. This quote ended up being the 4th one we received and was way better than any of their competitors.

Step Three: Start Looking for House in Your Desired Area

This seems like it would be a fun step but for us living in the biggest city in America, this was very stressful. We live in Jacksonville so we had the fun experience of thinking a house was in a good area and realizing it was 100% not and the “good area” was just one street over. We looked at a lot of beautiful, completely remodeled houses for a great price, but the neighbor had an old bathtub in their lawn. You have to make sure that you are somewhere safe and that when you try to resell your home, you’re not going to have to struggle to do so.

Jacksonville also has really cool, trendy places to live in. There are a lot of Historic Districts here that have amazing houses and neighborhoods. This was our ideal place to live, but when looking at the price tag, we realized this wasn’t realistic for us at this stage in our life. I knew that I did not want to be house-poor, and I also knew that I had a very busy lifestyle and couldn’t spend all my time and money completely remodeling a house. We came to a middle ground of living in a very safe, quiet, neighbor with a completely remodeled house. Yes, it does take me 15 minutes to get to the nearest Chipolte (this has been my current greatest tragedy), but I get to spend my time and money doing fun things and I don’t have to be worried about getting robbed.

Step Four: Start Looking for a Home

This can be the most fun part of buying a home. You get to look at a bunch of pictures, visit open houses and imagine how you would decorate everything. But for us, this was the most stressful part. Luckily we had my husband’s parents to help us look and since they were experienced buyers, they could help us look for things that we might miss. There is so much you need to consider when buying a house. Like how old is the roof, AC, windows? Is it wood-frame or concrete? Does it have a termite bond? What is the rating for the schools that the house is zoned for? Another thing is a lot of people will “flip” a house and it might look nice but they sometimes use the cheapest materials which will not last.

Living in Jacksonville we had the challenge of finding houses that were absolutely perfect but then losing them in bidding wars or they were just bought before we could even look at them. It definitely did not feel like all the TV shows were you casually look at like 4 houses and then put a low ball offer and hope for the best. I think we looked at about 30 houses until we found the house that we bought. However, this experience is very different from city to city.

Step Five: Putting an Offer on a Home

This is the very strategic part of the house buying experience. We put an offer on four different houses. Two of the houses we were outbid (and we offered over asking price), one we got but after the inspection, we decided to back out, and the last one was ultimately the house we own now.  This is when you will look at how long a house has been on the market and the prices of the houses around it to help you decide how much you should offer. I would also recommend talking to more experienced home buyers.

Step Six: Inspection and Appraisal

After your offer is accepted, you will need to get an inspection. This is when an outside party comes in and looks at all aspects of the house to make sure you really know what you are buying. During this time you will be in contact with your lender and will discuss when to get the appraisal. An appraisal is to let you know what your house is actually worth. Every house is going to have something come up in the inspection, whether it’s a loose screw or it needs a new roof. This is when you can decide if you want to back out, ask the seller to fix all the issues, negotiate the price, or ask for a credit to fix the issues yourself. Our house was built in 1986 but was totally remodeled by the seller. We had a very thorough inspector and we just asked the seller to fix all the minor issues which he did without any problems.

Step Seven: Closing

This is pretty much the easiest part. We just had to make sure we wired the down payment to the lawyer of our seller, show up to the closing, and sign a bunch of papers. We had to wait less than a month from the time we put our offer down to when we closed which is a really short time frame. I know some people who took three-months to close, but I think these were people who already owned a house or were buying a house from someone who had to wait to move.

There are a few steps in between that I kind of skimmed over, like finding a realtor, getting homeowners insurance, breaking your lease from your apartment or condo, etc, because these things are a little more personal and vary from situation to situation. If you ever have any questions about anything, feel free to reach out!

Pictures of Our House

 

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